Today crude oil prices jumped up to $27.34 (6%) in pre-trading because traders expected positive results of the meeting of the largest exporters of “black gold.” Unfortunately, right before publication, oil has dropped down. For onlookers, the past couple of weeks have been a roller coaster ride for oil prices.
This month, the oil rebounded from the multi-year lows, as Russia, Saudi Arabia, and the United States agreed to hold another round of negotiations in the OPEC+ format.
However, investor optimism has declined in recent days, as the Russian Federation and Saudi Arabia insist on the necessity to reduce production in the United States.
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Problems With Oil Agreement
The reduction of American output is almost impossible to coordinate since oil production is carried out by independent companies, and antitrust laws limit the impact on prices. Also, the Russian Federation is demanding that Brazil, Norway, and Canada join the reduction treaty, as they depreciated the efforts of OPEC+, replacing the reduction in market volumes with their oil.
Today at 16:00 (GMT+2), the OPEC+ video conference is planned. The stabilization of the prices may take more than one round of negotiations, so traders and investors need to be careful.
3 Oil ETFs to Trade
For traders that have a HUGE stomach for risk, there may be an opportunity to trade the “bounce up.” Unfortunately, for many investors of the leveraged energy ETFs, ETNss, and MLPs, there is little hope of a return of their value even after the end of the oil price war.
Here are 3 oil ETFs that traders should consider:
Energy Select Sector SPDR Fund (NYSE: XLE): XLE is a very broad energy ETF that invests primarily in well-established companies like Exxon Mobil.
SPDR S&P Oil & Gas Exploration & Production (NYSE: XOP): XOP focuses on smaller, independent exploration and production companies.
VanEck Vectors Oil Refiners (NYSE: CRAK): CRAK invests stocks of the companies that turn oil into refined products like gasoline, heating oil, diesel, and jet fuel.
WTI Crude Oil Price Support and Resistance
On the 4-hour chart, crude corrected towards Bollinger bands’ M.A. The indicator is directed sideways, and the price range is limited, which indicates the correction dynamics for oil.
Resistance levels: 28.10, 33.25, 37.66, 43.55.
Support levels: 26.00, 23.70, 19.30, 18.00.
Stock Market Morning Report
S&P futures are mixed, flat to up 1 point, as…
- Investors await weekly jobless claims data for further clues on the severity of the unemployment situation.
- Speaker of the House Nancy Pelosi said a bill with another $250 billion in relief for small businesses would not pass the chamber unless other measures were included.
- President Donald Trump reiterated his desire to reopen the U.S. economy as soon as possible but not until the coronavirus outbreak was under control.
- Domestic coronavirus cases rose for the second straight day but remained below the April 4 peak.