1.0 Introduction
Fuel prices are falling in recent months. CAD trading forex pairs (CAD is inversely correlated with the price of Oil) as well as Oil in recent weeks are in the strongest trend in the last 10 years. Some experts predict that the price of "black gold" in the coming period could fall below $ 20 a barrel. In this case, analysts estimate, many countries have to stop production.
As we know, the price of oil is based on supply and demand. Despite claims that oil demand falls, data from the International Energy Agency show that she, on the contrary, is growing. But the scope of supply growing faster than demand, and there is a major problem.


Figure 1: Huge drop in Oil price since June 2014. From $115 in 2011 till $28 in 2016.

2.0 The impact of oil prices on certain global manufacturer
Today I heard more interesting news which can influence on Oil price. The Iranian Oil Ministry has ordered today that oil production in the country increased by 500,000 barrels a day. This decision was made after the European Union lifted sanctions on Iran in accordance with the nuclear agreement reached six months ago, after the International Atomic Energy Agency (IAEA) confirmed that Tehran has fulfilled its obligations. Iran has so far produced 2.8 million barrels of oil per day.

Russia is now preparing for the "worst case scenario". The government is taking all necessary measures to alleviate possible problems. Government also confirmed that it plans to reduce its costs by 10 percent over the level budgeted for the year 2016 to adjust the price of oil.The budget for 2016 has been prepared on the basis of oil price of 50 dollars per barrel, and foresees a deficit of three percent of GDP, which is the limit that President Putin ordered not to be exceeded.

The dizzying drop in oil prices started cooling of relations between Russia and the West, which analysts interpreted primarily as an attempt to attacks on Russia and Venezuela, whose economies largely depend on energy exports, a major role in determining the price of oil experts attribute Saudi Arabia and the United States. However, if oil prices fall below $ 30 a barrel, is forecast that as many as one-third of US oil companies could go bankrupt during 2017.

When I make fundamental analysis about Oil prices I always watch news from Organization of the Petroleum Exporting Countries (OPEC). Countries that produce and sell oil persistently trying to work together to stop the rapid decline in the price of "black gold". The president of OPEC convened an extraordinary meeting of the oil cartel in early March to discuss the collapse of oil prices on the world market. Some OPEC members, such as the United Arab Emirates, oppose holding the meeting, but the majority supported the idea. In Saudi Arabia and the United Arab Emirates believes that prices will return to an acceptable level in the second half of 2016 because, as they say, outside OPEC recorded the sharp reduction in the annual growth of production.

The last meeting of OPEC member states was held on 4 December 2015. At the meeting, member states have failed to adopt a quota on oil production of 30 million barrels per day, despite record low prices.

The economic situation in the world is closely linked to the geopolitical situation in some parts of the planet. In particular, the stability of the Middle East are heavily dependent on energy prices. This is precisely the reason why many financial analysts closely monitor the relationship between the key countries in the region. Saudi Arabia is the largest producer of "black gold" in OPEC, which Iran is also an important member, which is fomented fears that their diplomatic feud could lead to a disruption in oil supplies.

Crude oil type "Brent" was again below $ 30 a barrel, as the prices in Asian trading today weakened due to rising reserves of this resource in the United States, prolonging the agony in terms of global supply glut. Hopes that the "free fall" in oil prices be stopped shaken after the latest report from the US, which showed that US inventories of "black gold" plus another 200,000 barrels in the week ended January 8th. More important is the fact in the report by the US Energy Information Administration (EIA), gasoline inventories rose by 8.2 million barrels, while distillate stocks by 6.1 million barrels, which indicates very slow spending in the US, the world's leading oil consumer. EIA has lowered its forecast of global demand for oil to 95.19 million barrels per day this year with 95.22 million barrels, as predicted in December, and at the same time raised the assessment of global production.
As he points out, the EIA report is expected to continue to outstrip supply and demand this year, while inventories continue to grow before it comes to balancing next year.

China, the second largest economy in the world and the leading energy consumer, faced with weakening economic growth and, more recently suffering and turmoil on its stock exchange.

The Government of Qatar will raise gasoline prices by at least 30 percent, announced the state oil company, and that is the last in a series of Persian Gulf countries which decided to reduce subsidies on fuel due to the fall in oil prices to a 12-year low. Rich in natural gas and oil, Qatar is facing a decline in revenue as oil prices now hover around $ 30 a barrel, the lowest level in 12 years, while nearly four years, until 2014, were at a level of about $ 100 per barrel.

3.0 Technical Analysis for Oil price
From 2014. Oil price went down very fast and if we look daily chart we can see something very rare when we talk about Oil. Relative Strength Index is on level 20. It is one of the biggest drop in history.


Figure 2: RSI on 20 level.

If we look Ichimoku cloud and B.Bands we can see huge spread and price on low B.Band line and much lower from cloud. Without any divergence, technical analysis is showing that we can not see some huge rebound and breakout in near time.Only if price went above 41 than we can talk about real breakout.

Figure 3: Price on Bolinger Bands lower line far away from Ichimoku cloud.

Swing traders can see nice opportunity for short term buying (only some kind of correction because price is on 20 level of RSI).


Figure 4: Swing traders opportunity. Buy signal for short time correction.

This buy trade is very risky but can be nice try for short time traders. 37 is target and stop loss is 28.

4.0 Technical Analysis for Commodity Pairs

USDCAD, NZDUSD and AUDUSD are commodity pairs.Canada, Australia and New Zealand are big exporters. When we have strong China economy and strong demand for Oil, this countries create strong profit. This year didn't start good for this countries and forex pairs. CAD,NZD and AUD went down.USDCAD Extends Longest Rally in 30 Years and this 13 years high. AUDUSD and NZDUSD made drop and went into last year support area.

Figure 5: USDCAD reached 30 Years high, RSI went to 90 on daily chart.

Figure 6: USDCAD rising channel.Swing traders can trade short time bearish correction.


Figure 7: AUDUSD strong bearish trend. Short time correction can go till 0.71.

Figure 8: NZDUSD strong bearish correction. Short time correction can go till 0.665.

5.0 Conclusion

Strong drop for Oil, CAD, NZD and AUD is correlated with Oil world problem. Weak demand and bigger supply made one of the biggest drop on Oil prices. This is 30 years high for USDCAD. There is strong probability that Oil price can go further down.I will wait for Bank of Canada economic news in this week to see next development.
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