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Biden inauguration may stoke optimism for oil producers

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Golden FX Link Capital business manager Chhea Chhayheng.

Biden inauguration may stoke optimism for oil producers

As newly elected US President Joe Biden entered the White House on Wednesday with climate change as one of his top priorities, it could signal a game changer for some major investments.

Among others, Biden plans to achieve net zero emissions by 2050 and promised that the US will rejoin the Paris Agreement, a key document for reducing carbon emissions around the globe.

Biden’s bold moves could possibly cheer up investors who invest in eco-friendly companies.

The oil sector could also be boosted this year after most oil producers spent 2020 focused on reducing costs to survive the lower price regime, with this year starting off much better for the industry.

The price of oil has been up more than 10 per cent, rising above $50 a barrel for the first time since last February, according to the Nasdaq.

That rally might be just the beginning, given how crucial $50 crude is to some oil producers.

However, the oil price was down on January 18 in Asia, after seeing its biggest slump in almost four weeks on a combination of a stronger dollar, weak US economic data and the ever-surging number of Covid-19 cases globally.

The price of oil fell 1.03 per cent to $51.87 a barrel.

Friday’s disappointing US data showed that core retail sales contracted 1.4 per cent, the Producer Price Index grew 0.3 per cent and retail sales shrank 0.7 per cent in December.

The data demonstrated the challenges facing the US economic recovery from Covid-19 and increased worries about weak fuel demand.

Also adding to these worries is the ever-growing amount of global coronavirus cases, with the number close to 95 million as of January 18, according to Johns Hopkins University data.

Yet crude oil may be looking for a sideways movement of price this week as Biden moves into the White House.

For technical trading recommendations this week, notice a daily chart of oil price between $50 and $53.70 dollars a barrel.

Investors should wait and buy crude oil at $50.50 to $51 a barrel and take profit at $52.50, with the stop loss at $49.80.

For traders, they can wait to sell crude oil at $53.70 a barrel and take profit at $52.30, with the stop loss at $55 a barrel.

Content image - Phnom Penh Post

Content image - Phnom Penh Post

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