Crude Oil Falters as Russia Boosts Exports

Strong investor sentiment and a high-risk appetite have dominated the financial trading markets throughout the previous week. Investors were largely concentrating on assets such as NASDAQ and Bitcoin which benefited from the increased market confidence within the market. The NASDAQ increased by 4.50% throughout the week and rose to a 6-week high. While Bitcoin also renewed its price highs. 

However, the price movement during this morning’s Asian and European Sessions has indicated a more skeptical tone. The equity markets, including European indexes and the US futures market, are declining from the day’s open price. Investors will be monitoring if the price continues to struggle throughout the day. 

Crude Oil Fails to Break Psychological Pricing 

The price of Crude Oil over the past 2 weeks has remained within a price range between $78.45 and $82.65. Investors seem to believe the accurate pricing for the commodity is within this price range. The price of Crude Oil on Friday rose closer to the previous resistance point but quickly declined by over 4% once the US trading session opened. 

Many investors have questioned what influenced the latest price movement. 

Reports from Russia regarding the supply originally sparked the bearish price movement. According to the report, the supply level from Russia has remained the same and in January the export figures from the Baltic ports increased by 50% compared to December. According to experts, Russia has increased exports specifically within the Asian market and is selling at a discount, enabling them to flood specific markets. 

The above has resulted in the price being influenced by opposing factors. The price has been supported by the latest economic figures from Europe, China and the US. One of the latest news supporting a rise in demand is China's internal flights which have increased by more than 80%. However, the price bullishness may be limited while the supply level has increased. 

Investors will now be turning their attention to this week’s monetary policy decisions and OPEC’s meeting on Wednesday. OPEC is not expected to make any major alterations to their supply and production targets, though traders will scrutinize any indications. 

Technical analysis has mainly pointed towards a downward trend when considering Friday’s US session and this morning’s Asian market. However, investors should be cautious that the price remained within last week’s price range. Swing traders will monitor if the price can break below $78.78 and $78.45.

SNP500 and NASDAQ - Investors Monitor New Scheduled Earnings 

Markets were largely concentrated on the NASDAQ during last week’s trading due to the scheduled earning reports. The NASDAQ outperformed both the SNP500 and Dow Jones increasing by 4.40% by Friday’s market close. The technology market’s bullish trend measured significantly higher than the SNP500’s modest 2.30% climb. 

However, investors should note that the SNP500 will also be in focus this week and the NASDAQ. Multiple company earnings will be made public which are components of the SNP500 but not the NASDAQ. Before the market opens tomorrow, the following companies will release their earning reports which were components of the SNP500 but not NASDAQ:

• ExxonMobil - Expected Earnings Per Share $3.32
• Pfizer - Expected Earnings Per Share $1.05
• McDonalds - Expected Earnings Per Share $2.45

The stock market has been supported by multiple economic data released over the past week. The US economy has confirmed a better-than-expected Gross Domestic Product figure as well as a resilient employment sector. Both have indicated that consumer demand may return to previous levels while the Fed takes a softer stance. Economists believe the Federal Reserve will hike 0.25% on Wednesday, but investors will be more interested in comments made by the Chairmen during the press conference. 

Investors are eager to hear whether the Chairman will indicate another 0.25% hike for the next month. In addition, markets will continue contemplating if Mr. Powell believes a rate cut towards the end of the year is still not a possibility. A softer stance and dovish indications can fuel another bullish run in the equity markets.

Summary:

• Crude oil fails to break the resistance level and declines by more than 4%. Russia confirms exports have increased by 50% in January. 
• Investors also add the SNP500 to their watchlist as earnings come in thick and fast. 
• Investors are eager to hear whether the Chairman will indicate another 0.25% hike for the next month.
• Investors turn their attention to tomorrow’s earnings reports from ExxonMobil, Pfizer and McDonalds.