FUNDAMENTAL ANALYSIS by Michael Stapleton
FX
$30 Oil in Six Months U.S. shale producers cannot lose
This year U.S. shale producers are prepared to increase production at $40 a barrel and use short positions to profit when the price falls to $30.
The price of oil has been steadily rising this year as speculators
bet
that a meeting next month in Doha between the Organisation of Petroleum Exporting Countries (OPEC) and oil producing nations outside
of OPEC will cut production. The oil market is
currently oversupplied and a cut in production will balance supply and demand. Despite the anticipation, it is unlikely that there will be a production cut agreement. A change in policy requires Saudi Arabia, Iran, Russia and the United States to act in unison. Each of these countries are currently working against each other with no intention of changing course.
oil Saudi Arabia is the de facto leader
of OPEC and has the final word on all policy implementation. The Kingdom depends upon oil revenue to sustain economic growth. Government institutions and public spending initiatives are predominantly financed by oil exports. Instead of cutting production to increase the oil price
and revenue, the country
has reduced public spending and sought international loans to prop up the economy. The oil rich nation
FX TRADER MAGAZINE April - June 2016 27
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95