How is Oil affecting the world wide markets?

How is Oil affecting the world wide markets?

Most people when they think of crude oil, they automatically associate the countries in the Middle East.    However, Middle East countries are not the only countries producing crude oil.     We are going to look at the other countries that are exporters of crude oil.

Before we look at the individual countries, let’s see where we are at with crude oil today.

Please note, all the charts are provided by eSignal.

Below is the monthly chart for Crude Oil.    As we have been mentioned on twitter, we had a high probability of retesting the last pivot low of 42.30 which was established April 2015.    If you look back in history, this is a critical support.   At the end of 2008 and beginning of 2009, price went below this support level but always closed at this value by the end of the month.    If price repeats itself, the same could possible happen now.   The bearish momentum is strong where we could break the 42.30 support and go lower but at the end of the month, price comes back to close at 42.30.   Only time will tell but right now, all the probabilities are bearish with no weakness at all.

2015-08-12_crude

 

Let’s now look at some of the other countries that are affected with crude oil “dropping” that many people don’t talk about or think about.

The first country we will talk about is Norway.  They are huge suppliers for all of Europe.  The week of June 29, crude oil started to go down.   This time is shown on the chart.   Since that date, price has consolidated for the Norway stock market.   The affects of Crude oil has not caused the Norway stock market to drop drastically at all YET.  It has stalled the bullish trend and now price is consolidating.  If price gets below 600, a bearish trend can possible start to occur.

2015-08-12_norway

 

Below is the weekly chart for the Malaysia Stock market supplied by eSignal.   When crude oil started to go down around June 29 week, price was still consolidating holding the support at 1708.   Last week, we broke the support and started the journey to the next major support at 1604.  This week, price drastically dropped due to crude oil and also the Chinese currency devaluation.    Right now, we are holding this support but anything can happen since a bearish trend has now developed on the lower time frames.

2015-08-12_malaysia

 

Below is the weekly chart for the Russian Stock market supplied by Esignal.     As you can see from the chart, crude oil dropping has not affected the Russian stock market yet.    In fact, it is at the top of the consolidation pattern retesting a major resistance at 1703 right now.

2015-08-12_russia

 

Below is the weekly chart of Saudi stock market supplied by eSignal.    The stock market has gone down but the drop of crude oil has not caused a bearish trend.      Price is at a major support of 8564 right now.

2015-08-12_saudi

In summary, crude oil has dropped drastically and retesting the last lows.   However, the stock market for the suppliers has not been affected that much YET.   China devaluing it’s currency has affected the global stock markets then crude oil.

It could be a delayed reaction where the affect will be seen 2-4 months later or the markets have already priced in crude oil being at these levels.

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About the Author Manesh Patel