The fluctuation in the oil prices continues to dampen the sentiments of the market players as the wide fluctuations in this commodity has the potential to dent the investors’ sentiments. The prices of Brent crude have witnessed a substantial decline primarily on the back of the increased US crude inventories. Also, the participants in the oil markets are already concerned about the higher supplies because of the expectations of weaker demand. Earlier, there were tensions that the oil prices can trend higher at a rapid pace mainly because of the sanctions on Iran by the United States. However, the US also allowed waivers to some of the countries. At present, the market players are more worried about the falling oil prices. Additionally, the unfavourable momentum in the broader financial markets puts the market investors in a dicey position.
However, the oil market participants are eagerly waiting for the meeting which is fast approaching as the meeting might provide some support to the falling oil prices. The meeting would primarily be focused on reducing the production levels which might help in easing the concerns of the investors. The market participants are getting more concerned about the oversupply situation which could further impact the oil prices. Thus, it would not be wrong to say that the oil market outlook, as well as its foundation, is primarily based on the meeting.
However, today i.e., November 29, 2018, the oil prices witnessed the rise and thus erasing some of the negative momentum which was witnessed in the session earlier as discussed above. However, it can be said that this increase was still not enough to erase the worries prevailing in the minds of the investors because of the higher US crude inventories. Moreover, the investors’ sentiments are also impacted by the global geopolitical tensions. It can be said that the stability in the oil markets is very much essential which can only be brought in by the OPEC. The production cuts, which is widely anticipated by oil market trackers, might help in regaining the prices of the oil. The geopolitical tensions have the potential to significantly impact the oil markets as well as financial markets and these markets, in turn, affect the behaviour of the market investors. However, the settlement between the US and China trade fight can also bring some stability in the equity markets, and the equities might experience some inflows.
With so much going on in the present scenario, the market players need to stay calm and undertake a position after the careful consideration of the global macro headwinds and the micro factors. Needless to say, the settlement of the trade battle would also be positive for the technology sector which could help in improving the market’s performance.
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