Market News & Analysis
Oil worries are bigger than Norways exit
Ken Odeluga March 8, 2019 5:25 PM
News that Norway's Sovereign Wealth Fund will drop oil investments sees oil shares slide and Brent crude also under pressure. Still, investors may not be that bothered. Price falls aren’t severe enough to peg the drag to news from Norway.
- Exxon, was last down 2.2%. Britain’s Shell, was also off about 2% in New York; rival BP fell 1.2% lower, France’s Total SA similarly weak. Brent futures were sold with more conviction, losing as much as 2.4%; though they saw much sharper volatility a few months ago on a mixture of oversupply fears and a cross-market rout that both hit in Q4
- Norway’s SWF began formally considering its move in late 2017 having floated a possible oil exit in 2015
- Friday’s oil price weakness looks more to do with worsening global economics—possibly including a surprisingly weak U.S. unemployment report earlier—and soaring U.S. shale oil output
- Exxon this week hiked capital spending with a huge ramp in shale production plans. Rival Chevron also unveiled a big shale expansion. Both U.S. oil giants are upping output just as world growth turns objectively dicier
- Exxon technicals
- Shares enter a ninth year of trading between $66.80-$104 range
- That suggests a floor for current selling that has the price at $78.87 as I write
- The shorter-term view shows XOM respecting rising trend line support, forming a triangular structure with support since late-December
- The stock shows every sign of being capped by $80-$81 again, resistance over the last few days and also in December
- The positive bias would be nixed should price see the other side of its current rising trend line, something that hasn’t occurred since inception
Price chart: Exxon CFD – 60-minute intervals
Source: City Index
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