Market News & Analysis


Top Story

Markets Not “All In” on Saudi Aramco IPO, China-US Trade Deal Strokes Fears

As my colleague Matt had written last week, Saudi Aramco began its road show to begin showcasing the state owned giant to investors yesterday.  They expected to wrap it up before the OPEC meeting on December 4th in Vienna.  But according to Bakr, which covers OPEC and Middle East Oil policy for the Energy Intelligence, multiple international investors have reportedly told Saudi Aramco that they would limit participation in the IPO if it is valued of USD 1.5 Trillion.  In addition, comments out of China that a trade deal, or changes to the trade deal, may not happen before the end of President Trump’s presidency are also affecting the oil market.

Yesterday on the Monday morning reopen, the Light Crude Futures gapped higher, only to quickly fill the gap and trade lower on the day.  Price moved lower from a high of 58.17, broke lower through the 200-day moving average at 57.37 and is currently down nearly 2.25% on the day, putting in a low so far of 55.62. 

Source:  Tradingview, NYMEX, FOREX.com

After gapping higher in mid-September because of the attacks on the Saudi Armaco facilities, price began to trade lower and retest the band of support of lows near 51.20.  Crude then bounced in a rising channel to the 50% retracement level from the price after the previously mentioned gap highs to the October 3rd lows near 57.50.  Price is currently sitting at the bottom trendline of the rising channel at 56.05.  As a result of the bounce, Crude has put in a flag formation and if price breaks lower below the bottom trendline, it will have broken the flag formation.  The target for a flag is the length of the flagpole added to the breakout price, which in this case would be near 46.75.  If price reaches the target it will be well below the previous support zone of 51.50/51.20.  Watch for price to pause if Crude trades down to that level.  Horizontal resistance comes in above near 56.57, and above there at today’s highs of 57.19.

Source:  Tradingview, NYMEX, FOREX.com

Saudi Aramco has reported just recently that they have almost enough early orders to successfully undertake their IPO, however this not to have phased the price of Crude, as it continues lower (for now).  Watch for more comments regarding the IPO, which may give direction to the price of crude. But for now, it appears US-China trade deal fears may be driving the market.  In addition, the American Petroleum Institute (API) is set to release their crude oil stock change for the previous week after today’s close.  API’s were down 500,000 last week.  If there is a large change, this can also move the price.


From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.