Oil aims to close post-OPEC+ gap
20 April 2023
Wednesday was very quiet on the market and no substantial volatility was observed. The calendar was empty, too, with only one piece of tier-one data published. It was the inflation from the UK which, surprisingly, came above 10%. The reaction to the number was quite typical – the GBP strengthened, anticipating a tougher stance from the BoE.
Today’s calendar is not extremely busy, either. We already learned the most important number – the inflation in New Zealand. In this case, the actual number came lower than expected (1.2% vs 1.5 %exp). The reaction to this number was pretty straightforward – the NZD is now the weakest currency among the majors. Interestingly enough, the weakening was not contagious for the Australian Dollar who is doing great today, in spite of the currencies going hand in hand pretty much every day.
Most certainly, a big story is currently unfolding on the chart of oil who is dropping significantly. This is important, as we are currently closing the gap created after the OPEC+ output cut. Since the very beginning, I have claimed that this gap will seemingly be closed soon. This is precisely what is happening now, even after the bullish data from the inventories yesterday having dropped more than expected.
The European session on Thursday starts with a visible drop in the indices. It looks quite promising for sellers and there is a chance to see the 15650 points on the DAX and 4070 points on the S&P 500 soon.