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OPEC Meets to Discuss on Oil Prices

  • DAR Wong
  • 3 December 2018

Fundamental Outlook   Last week, the U.S. Federal Reserve Powell was criticized by President Trump of favoring rate hike policy that has caused prices slump in Dow market. Soon after Trump’s remark, Powell held a press talk and commented that FED fund rate is near to neutral benchmark and lifted the stock markets.

 

Saudi Arabia signs a letter of offer and acceptance to purchase USD15 billion worth of THAAD missile system. Market analysts interpret this as a closure of Khashoggi’s murder case after President Trump commented earlier of his preference to maintain business relationship with Saudi than to pursue the mastermind of murder, which could be linked to the royalties.

 

China reports an unexpected fall in manufacturing index as the November reading at 50.0 benchmark, first time since August 2016. Media is focusing on the Trump-Xi talk on coming G20 meeting this week, though most analysts do not expect positive outcome from the trade negotiation.

 

OPEC members and Russia will meet on 6 December in Vienna to discuss on the adjustment of oil prices in international market. Saudi has committed not to induce another supply glut while most oil producing countries are favoring on oil recovery to increase their revenues. Despite that, U.S. President Trump has openly reiterated many times to prefer low oil prices in order to contain inflation.

 

Technical Forecast   USD/JPY traded in narrow range last week largely from 113.00 – 114.00 region. This week, we forecast the selling pressure will emerge rather strong on the topside region while the trend is prone to falter at 111.00 level. Dollar strength is essentially import to be observed as a main lead to Yen on inverse correlation.

 

EUR/USD stood on 1.1250 support last week and recovered to 1.1400 region. This week, we foresee the trend will be sideways in mixed sentiment from 1.1250 – 1.1500 region. Breaking in either direction will lead into a new headway while depending on Dollar clue.

 

GBP/USD rattles in tight range from 1.2730 – 1.2830 due to the uncertainty of BREXIT deal. Traders are watching closely on the progress of negotiation between Prime Minister May and European Commission on the terms of leaving EU bloc in April 2019. This week, we reckon the trend will move from 1.2700 – 1.2900 range in caution and sensitive to ongoing news of BREXIT deal.

 

Gold prices have been trading from USD1210 – USD1230 /oz amid mixed sentiment. Basically, we have seen strong bargain-hunting in the market but firm Dollar is still a crucial factor to weigh on yellow metal. This week, we foresee the market will thread in abovementioned range but with a likelihood of surging towards weekend. Technically, piercing above USD1240 /oz will gather a new strength to drive higher to USD1270 /oz.

 

WTI Crude prices have been consolidating from USD50 – USD52 /barrel in tight range. This week, the outcome of OPEC meeting will be an important factor to lead the market trend out of the constriction. Fundamentally, we are prone to see a short-covering and aim at USD55/barrel if the USD52 /barrel resistance is broken. However, beware of unexpected fall beneath USD50 /barrel in case the meeting in Vienna on 6 December fails to hold the oil prices.

 

Silver prices traded in flat pattern for another week with low demand. Technically, we have identified the range to be USD14.00 – USD14.50 /oz and the likelihood to bounce is potential. Ultimately, we believe the pierce above the USD14.50 /oz resistance will lead to a new bullish trend in near future. Based on the XAU/XAG ratio chart, precious metals in Gold and Silver are bottoming out and soon will rise!

 

Crude Palm Oil (FCPO) Futures on Bursa Derivatives ended higher on Friday after the market expectation on lower output has lifted the trend. On Friday, February contract closed at RM2039 /MT in short-covering. This week, we foresee the market will continue to strive higher with support resting at RM2000 /MT region. Topside recovery aims at RM2150 /MT in case of breaking above RM2070 /MT immediate resistance.

 

Disclaimer: This article is written for general information only. No liability by the writers, publisher or any third party involved in the distribution of this work.  

DAR Wong and Chong HC are the market strategists in APSRI on CPO markets. DAR has 29 years of trading and hedging experiences while HC trades for 11 years and now coaches institutional customers. They can be reached at www.pwforex.com


About the Author
DAR Wong (Singapore)
An international speaker with 27 years of trading experience in the global financial markets, DAR is a Market Master and author of “Living Daylight in Stock Market: Monetizing Your Profits in 8 Days”.

DAR Wong is an active market trader, registered fund manager, educator and author.He began his career in 1989 as an institutional Futures trader with Bank of America. DAR Wong specializes in trading global derivatives and financial markets. He has 26 years of experience accumulated through tenure with Bankers Trust, Barclays Bank, Citigroup (Smith Barney Shearson Inc) and as an independent trader.

DAR is the author of “8 Ways to Invest in China’s Emerging Market” and contributes frequently to regional media, including financial TV/Radio programmes, newspapers and magazines for professional traders and active investors.

He is a popular and sought after international speaker who has presented to financial professionals and investors throughout the region including Singapore, Malaysia, Indonesia, Thailand, Hong Kong, China, Cambodia, Myanmar, Philippines, Sri Lanka, India, South Korea, Laos, Vietnam, United Kingdom and Middle East (UAE).

DAR is registered with NASD (now known as FINRA) series 3 and 5 as approved by National Futures Association (NFA) of USA and holds a current portfolio as Fund Strategist and Advisor with Dektos Investment registered with Monetary Authority of Singapore.

DAR is profiled as “One of the most successful traders – Market Masters” in Brent Penfold’s bestselling book “The Universal Principles of Successful Trading “. In January 2015, DAR was honored with Outstanding Award for International Financial Market Analysis granted by ASEAN Commerce (Thailand).

DAR is the author of "8 Waysto Invest in China's Emerging Market" and contributes frequently to regional media, including financial TV/Radio programmes, newspapers and magazines for professional tradersand active investors.1

He is a popular and sought after international speaker who has presented to financialprofessionals and inverstors throughout the region including Singapore, Malaysia, Indonesia, Thailand, Hong Kong, China,Cambodia, Myanmar, Philippines, Sri Lanka, India, South Korea, Laos, Vietnam, United Kingdom and Middle East(UAE).2


Year
2003 - Set up ASPRI to provide hedging advisory for corporate clients and training for financial professionals
2009 - Released first book “8 Ways to Invest in China’s Emerging Market”
2010 - Profiled as “one of the most successful traders – Market Masters” in Brent Penfold’s bestselling book “The Universal Principles of Successful Trading” along with Larry Williams, Andrea Unger, Michael Cook, and Daryl Guppy etc
2011 - Received “Spirit of Enterprise”awarded by Singapore Management University in Singapore
2012 - Honored with Individual Diamond Career (Thailand) awardedby Royal Privy Council of Kingdom of Thailand
2013 - Appointed Vice Chairman of ASEAN-China Commerce Association and led a delegationtothe annual China-Asean Expo in Guangxi Province, China
2014 - Fund Manager cum Director in Dektos Investment Corporation registered with Monetary Authority of Singapore
2015 - Released new book “Living Daylight in Stock Market - Monetizing Your Profits in 8 Days” in January
2015 - Honored with Outstanding Award in International Financial Market Analysis awarded by ASEAN Commerce (Thailand)
2016 - Honored with Medal of Integrity by Royal Councilin Palace of Palembng, Indonesia

References

1.TV programs on ChannelNewsAsia (Singapore);Radio on 95.8 Capital (Singapore); Newspapers such as The Borneo Post (Malaysia), 资汇报 (Malaysia); Regional financial magazines such as The Analyst (India), 东盟商界(ASEAN, China), 资本杂志 (Malaysia).

2.Spoke at events for CME Group, Euronext LIFFE, Tokyo Commodity Exchange, Singapore Exchange, Korea Exchange, Bursa Malaysia, Thailand Futures Exchange, Jakarta Futures Exchange, Indonesia Commodity and Derivatives Exchange, Tokyo Commodity Exchange, Interactive Brokers, Xinhu Futures, Hangzhou Money Fair, China (Shenzhen) International Finance Expo, China (Guangzhou) International Finance Expo, Euromoney, CIMB, Maybank, RHB, UOB Bank, Asia Trader & Investor Convention, Global Rubber Conference, International Rubber Conference, Malaysia Rubber Board, International Rubber Research and Development Board,Malaysia Ministry of Agriculture, Rubber Industry Smallholders Development Authority, Vietnam Rubber Association, Cambodian Rubber Association, Bureau of Agriculture Research Philippines, Myanmar Rubber Planters & Producers Association etc.


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