Crude gains $7 in two weeks
Markets Forex

1 Like 0 Dislike 2 Replies
1 year ago

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Crude oil has had a sustained rally over the last fortnight and is currently trading at $46.4 (WTI). Much of the gain is attributed to news that Saudi Arabia is pushing OPEC members to look at reducing production of crude oil so as to drive prices higher. As a result, crude is now trading at close to 3-month highs.

What do you feel about this? Do you think that this rally will continue further or that it will collapse and reverse? Also, please share details of any open position that you may have in crude at this time.

Posted 1 year ago 0 Likes   0 Dislikes

Those are really valid points, Emma and Brian. OPEC limiting production and good US economic data are certainly likely to push crude oil higher. In fact, both WTI and Brent have moved up - currently, WTI is trading at $48.15 while Brent is trading at $50.89.

The current trend in both of these is certainly quite bullish. But, I think WTI has a resistance at around $49 while Brent has a resistance at $51 to $52. If these two are able to get past their respective resistance points, then a sustained further rally may be possible. 

Posted 1 year ago 2 Likes   0 Dislikes

WTI has moved up further to $47.02 while Brent is at $49.75. The $50 mark for WTI is looking more and more likely. I guess if the OPEC does decide to limit production then prices could move upwards very quickly. The markets are just responding to that possibility. 

Further, with two consecutive months of good employment data, there is strong belief that the US economy is doing reasonably well. Due to this, many people are suggesting that Feds may hike rates soon. Now, if the US economy is doing well, then demand from the US for crude may also go up. That expectation may also have a role in driving up crude prices.