Oil hit four-year lows around $70 a barrel on Thursday and commodity currencies like the loonie (Canadian dollar) were sent tumbling, as OPEC resisted the temptation to cut back production following the more than 30 percent plunge in prices since June.
Asked whether the oil producer group, which provides around a third of world supply, had decided not to reduce production, Saudi Arabian Oil Minister Ali al-Naimi told reporters: “That is right.”
The meeting had lasted over five hours and as the decision emerged both Brent and U.S crude prices were sent sliding as traders saw it as sign that OPEC members were effectively now in price war with each other.
Brent dropped to $71.58 and U.S. crude sank to $68.20 a barrel as both headed for $5 drops on the day, their biggest falls since May 2011. [O/R]
“Oil prices are now completely in the hands of the market,” Dominic Chirichella, director of New York-based Energy Management Institute, told Reuters Global Oil Forum.
Intraday bias remains bullish as 21 and 55 EMA are crossed upward. SSRC, MACD and RSI oscillators are also signalling more bullish momentum. More rise to re-test 1.14651 resistance is expected in the medium term picture as price rejects the 55 EMA on the daily charts and closes above the 21 EMA.
Tomorrow investors will be taking a close monitoring on the Canadian GDP.