Crude oil price jumps as Chesapeake prepares bankruptcy filings

The price of crude oil rose in overnight trading as the market reacted positively to the US inventories data. According to the EIA, oil inventories rose by almost 9 million in the past week. This was lower than the 10.6 million that analysts were expecting and the previous week’s 15 million. It was also the lowest increase in inventories since March. The market also reacted to news that Chesapeake Energy was preparing to file for bankruptcy. This is a major blow to the US oil and gas industry because the company was an early company in the shale industry. Other companies could move in the same direction because of how low oil prices are.

The Australian dollar declined slightly after China released the manufacturing and mon-manufacturing PMI data. According to China Logistics, the manufacturing PMI dropped from the previous 52.0 to 50.8. This was a slower expansion than the 51.0 that analysts were hoping for.  Another private survey from Caixin showed that the PMI dropped to 49.4 after expanding in March. Still, China seems to be recovering from the coronavirus pandemic. According to the FT, the country’s manufacturers of construction machinery have started to raise prices, which is a sign that activity is returning. The country is important for Australia because it is its biggest trading partner.

The biggest news of the day will be the ECB interest rate decision. The bank is expected to leave interest rates unchanged and possibly expand its quantitative easing program. This decision will come after the Federal Reserve left interest rates unchanged. In addition, we will receive the German import price index, retail sales, and the unemployment rate. We will also receive the eurozone’s preliminary inflation rate. From the US, we will receive the jobless claims and personal income and spending data.

EUR/USD

The EUR/USD pair rose slightly in the Asian session. It is trading at 1.0870, which is lower than the intraday low of 1.0850. On the 30-minute chart, this price is slightly above the 50-day and 25-day exponential moving average. It is also above the blue trendline. The pair will likely continue moving upwards as bulls attempt to retest yesterday’s high of 1.0885.

XBR/USD

The XBR/USD pair rose to an intraday high of 26.05 as the market reacted to news of Chesapeake bankruptcy. This is the highest price it has been since Thursday last week. On the daily chart, this price is along the 38.2% Fibonacci retracement level and is above the short and medium-term moving averages. The RSI has also moved above the overbought level of 70. Therefore, the price may continue rising as sentiment in the energy sector improves.

AUD/USD

The AUD/USD pair declined slightly in the Asian session as traders reacted to the relatively weak PMI data from China. The pair is trading at 0.6541, which is lower than yesterday’s high of 0.6558. On the hourly chart, the price is slightly above the 28-day exponential moving average while the RSI has remained below the overbought level. While the upward trend may continue, there is also a likelihood of a reversal as a new month starts.