FxWireProShort Term Outlook: Brent may Decline to $37/barrel
Global benchmark, Brent crude is likely to decline further from current $44/barrel level as supply pressure to build up further. Today, Saudi Arabia’s state oil giant and world’s largest exporter announced that it will expand production in 2016. In country’s Shaybah oil field, production is likely to rise by a third over the coming weeks, pushing it to 1 million barrels/day.
Moreover, weekend shakeup in Saudi Arabia’s energy ministry, which saw departure of Ali al-Naimi indicates the new command under deputy crown prince Mohammad bin-Salman (MbS), the regime will become more aggressive towards defending its market share. Amore aggressive Saudi Arabia and defiant Iran means OPEC will remain dysfunctional over supply.
In April, OPEC production rose to 33.2 million barrels/day, highest since 1989. As fresh supply from OPEC keeps hitting the spot market, we are likely to see more aggressive profit bookings in oil. Weaker Dollar may not be able to provide enough support, to keep prices buoyant in the near term.
Technically speaking, a key support around $44.3/barrel has been broken by sell off.
Trade idea –
Sell Brent at current price of $44.3/barrel and at rallies, with stop loss around $48.3 and with a target around $37.3/barrel.
The material has been provided by 
