Market News & Analysis

Top Story

Oil At 2 Week High On Coronavirus Optimism and Rosneft Sanctions

Crude is rebounding on Wednesday, paring losses after two sessions of declines, however the losses at the start of the week were just a slight blip in an otherwise bullish charge. Crude oil as rallied 1.4% so far this week, extending gains on 3.4% in the previous week. 

Oil is on the rise amid broad optimism that the hit from coronavirus will be short lived and amid supply concerns as the US moved to cut more Venezuelan crude from the market. 

Chinese manufacturers are starting to slowly ramp up again after strict lock downs and restrictions to prevent the spread of the deadly virus. However, as the number of new coronavirus cases in China declined for a second straight day on Wednesday investors are growing optimistic that the hit will be a short-term blow. Reports that the Chinese are close to developing a vaccine is also supporting the price of oil.

Rosneft Sanctions
A US decision to blacklist and slap sanctions on a trading subsidiary of Russia’s Rosneft has also underpinned the price of oil.  According to the White House, the Russian subsidiary provides a financial lifeline to the Venezuelan government, as Trump continues his campaign against Maduro. Importantly this is a direct challenge to Moscow, one of Maduro’s key supporter. Russia’s response has unsurprisingly been a mix of defiance and accusations.
Finally, oil is also being supported by the prospect by the prospect of deeper OPEC++ cuts. The group meets next month and are expected to discuss their response to the possible downturn in demand owing to coronavirus. Suggestions that the group could limit output further could boost oil further.

Levels to watch
After dropping over 15% across January, WTI rebounded off $49.3 at the end of January and has been marching higher ever since. 
WTI has pushed back above its 100 and 50 sma on the four hour chart, it remains below the 200 sma at $55.1. 
WTI is trading at the high of the day at $53.08. Immediate resistance can be seen at $53.30 (high 31st Jan) prior to $54.30 (high 29 Jan), before looking to target 56.00.
Near term support is at $51.30 trend line suopprt, prior to $50.80 and $49.30.


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.