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Oil heats up the trend



DATE OF PUBLICATION: 2021-02-23 15: 30: 22Banks and oil traders have drawn such a bright future for black gold that selling on such a market is like dooming yourself to failure in advance. There is a growing opinion among investors that thanks to the current super-cycle, Brent quotes will be able to return above $ 100 per barrel. The most optimistic bulls expect this to happen as early as 2021. The recovery of the global economy from the recession is often accompanied by growth in both demand and supply. But demand is likely to expand faster, as manufacturing companies cut investment amid the pandemic. In addition, the decline in oil production due to the unprecedented polar explosion in the United States will lead to a faster depletion of global reserves than previously thought. According to the Trafigura Group, due to the frost in the United States, oil supply will be short of about 40 million barrels over the next few weeks. With large-scale vaccinations and the associated opening of the world’s major economies, the market should ponder the question: will we have enough oil now, when Are we approaching the peak season? Indeed, the summer promises to be hot for black gold, so the “bullish” conjuncture or backwardation looks quite logical. Near-term futures contracts are more expensive than long-term ones, as traders are seriously counting on a significant increase in global demand. Oil market conditions The strengthening of the “bullish” spread contributes to the rapid unwinding of stocks accumulated during the pandemic. Vortexa estimates that the volume of oil stored at sea has fallen to an 11-month low, and Bacwardation is attracting speculators who drive prices up even further. In addition, how not to buy if Goldman Sachs raises its forecast for Brent from $ 60 to $ 70 per barrel in the second quarter and from $ 65 to $ 75 per barrel in the third quarter. Morgan Stanley notes that the number of new cases of COVID-19 is rapidly declining, and in non-OECD countries, refineries are operating at the same capacity as before the pandemic. These circumstances allow the company to expect that prices for the North Sea grade will rise to $ 70 per barrel in the third quarter. Socar Trading believes that this year we will see Brent at $ 80 per barrel. Optimism is certainly justified, but no trend is complete without a correction. The reason for the rollback may be the OPEC + meeting, at which the issue of increasing production will become acute. There is no longer a need for Saudi Arabia to cut production unilaterally, and Russia has previously objected to the prolongation of commitments to cut production. This circumstance is capable of cooling the hot heads of the bulls in Brent and WTI for some time, but it is unlikely to break the upward trend. Technically, the Wolfe Waves pattern was formed on the monthly chart of the North Sea variety, which allows us to determine the guidelines for the upward movement. They are located near $ 90 and $ 94 per barrel. I recommend using pullbacks to supports at $ 64.9, $ 63 and $ 61.15 to form longs. Brent, monthly chart Material provided by InstaForex – www.instaforex.com Source – InstaForex

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