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Crude Oil trading signals

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WTI Crude Oil: trading forecast for the week of October 4-8, 2021
WTI Crude Oil: trading forecast for the week of October 4-8, 2021 Brent crude oil demonstrates an attempt to break out of the resistance level in the area of 79-80 dollars per barrel. The rise in prices during the week was facilitated by the growing concern of traders with a reduction in stocks of raw materials around the world, with an increase in demand on the eve of winter. Such growth is seasonal, which provokes market participants to buy black gold.According to the latest media reports, the continuing shortage of supply leads to an even greater tightening of conditions in the oil market. At the same time, stocks in the OECD countries are likely to be at a minimum level to cover demand. This serves as an additional driver in favor of strengthening Brent crude.In addition, the trend of strengthening of black gold has been visible since mid-August. There is a high probability of reaching the maximum value on June 1 in the region of $115 per barrel, with further gravitation to the April maximum quotation in the region of $130 per barrel.But there are also risks, cases of coronavirus infection are growing in Europe. There is a growing likelihood of a slowdown in the consumption of European countries due to the prospect of the introduction of lockdowns. Recall that the Bank of England and the European Central Bank are likely to leave their main interest rates at the same level due to the threat of a pandemic. Their monetary policy is likely to remain unchanged this year.Oil trading is also affected by the consequences of Hurricane Ida, which led to the suspension of a significant part of the production capacity in the Gulf of Mexico. This, according to experts, more than offset the increase in production by OPEC+ countries since July of this year.The forecast expects the growth of Brent crude oil to the levels of 115, 130 dollars per ...
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OPEC raised the estimate of oil shortage in 2021
OPEC raised the estimate of oil shortage in 2021 Forex trading. WTI Oil forecast for today, September 30, 2021The price of WTI oil reached the level of $74.65 per barrel.Commercial oil reserves in the United States, excluding the strategic reserve, increased by 4.6 million barrels last week, or 1.1%. Analysts, on the contrary, expected a decrease of 1.7 million barrels. The increase in stocks was recorded for the first time in eight weeks. According to the results of the previous week, the indicator reached a minimum since October 5, 2018.Meanwhile, OPEC raised its estimate of the oil shortage in 2021 to 1.1 million barrels per day from the previously expected 900,000 barrels. In addition, OPEC expects that in 2022 there will be a surplus of supply in the oil market, which will exceed demand by 1.4 million barrels per day. Last month, OPEC predicted an indicator of 1.6 million barrels per day. According to the report, the alliance also expects that the supply on the oil market in October will be 1.2 million barrels per day lower than demand, and in November by 900,000 barrels.The next OPEC+ meeting is scheduled for October 4. Since August 2021, the alliance has been increasing production by 400,000 barrels per day monthly, hoping to gradually withdraw from its obligations by the end of September 2022. It is possible that the latest rise in oil prices will force OPEC to adjust its plans.The forecast expects a decline in the price of WTI oil to the levels of 74.4, 74.2 and 74 dollars per ...
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Slow recovery of oil production in the United States
Slow recovery of oil production in the United States The price of WTI oil adjusted to the level of $74.85 per barrel. Over the previous five trading sessions, oil rose in total by more than 7%, which was due to expectations of a recovery in demand and risks around supply.Traders are expecting statistics on oil reserves in the United States for the past week today. Analysts believe that commercial oil reserves in the country have decreased by 2.3 million barrels. This could be the eighth consecutive week of inventory declines. In recent weeks, the rise in oil prices has been associated with several factors, the key of which is the downward trend in world reserves against the background of a slight supply shortage. For the oil market in recent years, any deviation from the balance of supply and demand per million barrels per day contributes to the formation of a stable trend, which indicates the inelasticity of the market.The process of restoring oil production in the United States after Hurricane Ida is slow. According to the latest data from the Energy Information Administration, production is 10.6 million barrels per day compared to 11.5 million before the hurricane. The slow recovery of production in the United States is accompanied by the gradual depletion of reserve wells. This means that it is still far from the levels when drilling activity will be able to ensure sustainable production growth. The number of drilled but unfinished wells has been declining for 12 months in a row, and this process will continue in the near future.The forecast expects a further decline in the price of WTI oil to the levels of 74.6, 74.3 and 74 dollars per ...
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The market notes a noticeable shortage of oil
The market notes a noticeable shortage of oil Forex trading. WTI Oil forecast for today, September 28, 2021The autumn price rally continues on the oil market. A barrel of WTI oil has already reached the price value of $75.25 per barrel.Traders continue to positively assess the key factors of the oil market, including the prospects for demand, supply and forecasts of economic recovery. The current global supply-demand balance deficit is larger than previously expected. The risks of winter demand are now obviously shifted upwards. Expectations of economic recovery are also positively reflected in the prospects for demand, which is favorable for oil. At the same time, commercial stocks of raw materials in the United States are at a three-year low.According to the latest data from the Energy Information Administration of the US Department of Energy, daily production is 10.6 million barrels compared to 11.5 million before the hurricane. In such conditions, the market notes a noticeable shortage of raw materials, which is compensated by existing oil reserves. According to the estimates of the Ministry of Energy, in the third quarter, the global deficit may amount to about one and a half million barrels per day. In the winter months, the shortage of oil may grow even stronger against the background of the transition to it of some gas consumers, the cost of which has almost tripled since the beginning of summer and is near historical highs. Additional demand this winter may amount to 500,000 barrels per day, which will ensure that the deficit of about 2 million barrels per day for the fourth quarter will remain.The forecast assumes a rollback of WTI oil to the levels of 75, 74.8 and 74.5 dollars per ...
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The oil price in August. What is the threat of the conflict between Israel and Iran?
The oil price in August. What is the threat of the conflict between Israel and Iran? In the last month of summer, the oil exchange rate is likely to show a correctionIn August, the oil price depends on several important factors — first of all, the recovery of the market in the United States and the new flare-up of the conflict in the Middle East. The Israeli authorities have accused Iran of attacking an oil tanker, and the United States and Great Britain have already promised support to Israel. Against this background, the oil exchange rate moved to growth after a short correction, but it is not known how long this recovery growth will be. We offer a traditional analysis of oil prices.Reducing unemployment in the United StatesIn many ways, the positive movement on the US stock markets has a positive effect on the oil exchange rate: the S&P 500 and NASDAQ 100 indices traditionally update historical highs. According to data from the US Department of Labor, the number of applications for unemployment benefits has fallen sharply.During the last week of July, only 385 thousand such appeals were registered, and the total number of recipients of benefits amounted to 3 million people. However, the effect of positive news from the US markets has already been played out, and the dynamics of the oil exchange rate will need new incentives to continue growth.At the same time, macroeconomic statistics from the United States show an increase in the commodity deficit, which increased from $71 billion in May to $75.7 billion in June. This was largely due to a 2.1% increase in imports compared to the previous month, although exports increased by only 0.6%. This is largely due to a reduction in supplies, which in turn restricts production within the United States.There are already reports about how the spread of a new strain of coronavirus can affect the American economy. In particular, as the president of the Federal Reserve Bank of Minneapolis, Neil Kashkari, said, the new strain may slow down the recovery of the labor market. This completely contradicts the recent statement by Fed Chairman Jerome Powell, who assured analysts that the delta strain is not a risk to the American economy.Positive statistics on the labor market may force the Fed to change its approach to monetary policy and increase rates, as well as curtail the quantitative easing program. First of all, this will lead to a strengthening of the dollar, which in turn will affect the commodities denominated in the US currency. In this case, the oil exchange rate will be influenced by another important negative factor. Moreover, investors will begin to withdraw resources from risky assets, and then the Russian and Chinese stock markets will suffer.Already half of the US states have stopped paying increased unemployment benefits, which on the one hand indicates that there is no need for additional incentives, and on the other hand may mean an increase in demand for fuel. However, in any case, the statistics on the labor market in the United States may not be as positive as it may seem at first glance — the number of jobs outside agriculture, on the contrary, turned out to be less than a year earlier. First of all, this was caused by a large number of dismissals in the field of higher education.Read more: The history of Federal Reserve (Fed) and its functionsThe influence of China and RussiaAn increase in oil purchases from China can potentially act as a new incentive for the hydrocarbon market. So, China may soon announce an increase in quotas for the purchase of hydrocarbons. Moreover, it is expected that more oil will be purchased not only by small refineries from China, but also by large Chinese companies.The main seller of oil on the Chinese market is the Arab countries from the Persian Gulf, so first, most likely, prices for Dubai grade oil will rise sharply, and other grades, including the benchmark Brent, will follow it. However, these expectations are contradicted by the increase in the incidence of coronavirus in China — due to lockdowns and restrictive measures, traffic on some of the most important logistics routes is reduced.Moreover, the Chinese authorities have decided to restrict air and rail travel around the country. In the Asian region, the number of infected people has been growing recently. In particular, in Thailand, even new restrictive measures did not help to stop the increase in new cases. Similarly, in Sydney, Australia, the increase in new cases has reached a historic high, and the authorities expect the situation to worsen further.In turn, Russian oil companies are trying to use the OPEC+ deal to get more favorable working conditions inside the country. In particular, they suggested that the government reduce the tax burden on the industry, which in turn will help start the development of hard-to-reach oil. To do this, they proposed to create two new groups of deposits, for which they proposed to reset the tax on mineral extraction.The first group includes areas with the volume of initial reserves of less than 65 million tons and the degree of depletion of less than 1%. The second group includes the deposits of ultra-viscous oil in the Komi Republic. Moreover, the oil companies decided to stimulate the exploration of hard-to-recover reserves. To do this, it is proposed to use a traditional set of tools — tax deductions and reduction of payments for the mineral extraction tax. However, so far the Ministry of Finance is against the initiative, which is not eager to help oil companies and does not plan to change the taxation of the industry until 2023-2024, until the end of the OPEC+ agreement.At the same time, the further deterioration of the pandemic situation in the world may become a deterrent to the growth of oil prices. Recently, in order to combat the spread of a new delta strain of coronavirus, an increasing number of countries have been strengthening restrictive measures on the mobility of the population. Investors are particularly concerned about the situation in China, where domestic air and rail traffic was limited in order to localize outbreaks of the disease, which directly affects the oil exchange rate.Oil price analysisOil futures moved into the negative zone, without reaching the goals of a short-term rebound. These levels are located near the $73.50 and $71.50 marks, which corresponds to the average Bollinger bands on the daily chart. In general, the oil exchange rate is affected by downward pressure, and analysts are increasingly inclined to believe that a correction may occur in the hydrocarbon market in the near future. The support lines are located near the previous lows — around $70.20 and $67.50, according to the technical analysis of oil prices.Read more: What are futures: types, features, advantages and risksIn the first week of August, the dynamics of the oil exchange rate showed a failure-from about $75 to $70 literally from August 2 to 5. The reason for the increase is quite banal — the growth of fuel reserves in the American market, which indicates a decrease in economic activity. According to official data, inventories increased by 3.6 million barrels, while a decrease of 3.9 million barrels was expected. Moreover, analysts are influenced by data on the spread of a new strain of coronavirus in China, the United States and Japan, as well as the associated expectations of new restrictions.The most important factor that positively affects the dynamics of the oil exchange rate remains the growth of tensions in the Middle East. The conflict between Israel on the one hand and Iran and Lebanon on the other threatens the rapid exit of hydrocarbons from the Islamic Republic to foreign markets, as well as generally increases the uncertainty of oil transportation from the Middle East. As a result, literally in one day on August 5, the oil exchange rate recovered to $71 per barrel, and the next day it was already testing the level of $72 per barrel.A new conflict in the Middle East may become a significant factor that is likely to affect the oil price in August. According to Israeli Defense Minister Beni Gantz, his country is ready to start a war against Iran because of a drone strike on an oil tanker. We are talking about the attack on the Mercer Street oil tanker.Officially, the ship belongs to Japan, sails under the flag of Liberia, but it is operated by the Israeli company Zodiac Maritime. According to Gantz, the Islamic Republic has no more than two and a half months to come close to producing nuclear weapons. In this context, the attack on an Israeli tanker becomes part of a large-scale confrontation in the region. If the tension increases, the oil exchange rate may receive additional support.In turn, Israel has already received assistance from its traditional allies — the United States and Great Britain. As British Prime Minister Boris Johnson hastened to say, " Iran must answer for the consequences." In turn, the representative of the Iranian Foreign Ministry, Saeed Khatibzadeh, said that the Islamic Republic is ready to protect its security and national interests. US Secretary of State Anthony Blinken also joined the diplomatic skirmish, saying that Tehran was undoubtedly behind the attack, and the allies would prepare a "collective response" to this attack.Thus, two multidirectional factors: the strengthening of anti-bullying measures and the growing conflict in the Middle East are pushing the trajectory of the oil exchange rate in different directions. If the first factor leads to a reduction in demand, the second one seriously reduces the supply of oil — it is the Middle East conflicts that traditionally push the cost of hydrocarbons up. According to most analysts, the combination of two multidirectional factors can cause the oil exchange rate to fluctuate in a wide range from $68 to $75 per Brent, depending on the news background.Read more: Are the minutes of the Federal Reserve meetings useful for ...
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The price of oil is declining against the background of the worsening epidemiological situation
The price of oil is declining against the background of the worsening epidemiological situation At the morning trading on Tuesday, oil prices are declining. By 7.42 GMT, Brent oil fell to 72 dollars 85 cents per barrel, or by 0.05% compared to the closing price of trading the day before. The price of WTI oil fell to 71 dollars 22 cents per barrel, or 0.06%. Pressure on oil prices is exerted by information about the deterioration of the epidemiological situation in Asian countries. In this region, there is an increase in the number of infections with a new strain of coronavirus infection "delta". The authorities of a number of Asian countries were forced to tighten restrictive measures, including on movement. Analysts at Commonwealth Bank Of Australia note that the spread of the delta strain around the world will become a serious threat to the recovery of oil demand. Mobility restrictions are already being observed in some parts of the Asian region. This is the reason for the fall in oil demand. More than 60% of the world's oil consumption is accounted for by ...
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Brent oil price tops $73 for first time since May 2019
Brent oil price tops $73 for first time since May 2019 Oil quotations are rising amid expectations of a further recovery in demand. International Energy Agency forecasts oil demand to be higher than before the pandemic by the end of 2022.The price of Brent crude futures on the ICE London exchange has surpassed $73 in August, trading data shows. It peaked at $73.07 during the trading session - the last time Brent traded above $73 a barrel was on 20 May 2019.WTI Texas Intermediate crude futures are up 1.22% to $71.15 in July.The International Energy Agency (IEA) today published The IEA Oil Market Report (OMR), which said that oil demand will return to pre-crisis levels by the end of 2022. At the same time, the organization kept the demand forecast for 2021 at 5.4 million barrels per day.Read more: The International Energy Agency (IEA) - brief history and activityOPEC+ member countries will have reserves of around 6.9m bpd between May and July. And if sanctions on Iran are lifted, market supply would increase by 1.4m bpd in the short term.The price of Brent crude oil has been in an uptrend since May 21. During this period it rose from $64.5 to $73, and there were only two trading sessions which closed lower.The IEA stressed that OPEC+ countries will have to increase production to meet rising market demand. Bloomberg points out that road traffic in the US and most of Europe has recovered to pre-pandemic levels.At the same time, the full recovery of flights, and with them, demand for jet fuel remains in doubt, says Investec Bank's head of commodity markets, Collum McPherson. The return of Iranian oil to the market, he believes, will be a challenge for OPEC+ if demand does not pick ...
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Brent oil price forecast for 2021 and 2022
Brent oil price forecast for 2021 and 2022 In international markets, the price of Brent crude oil in April of this year averaged $65, which did not change compared to the average value for March. According to the US Energy Short-term forecast (EIA), published on May 11, 2021, they are projected to average $65 per barrel in the second quarter of 2021, and then an average of 61 per barrel in the second half of 2021, therefore, a correction is expected to develop.Brent crude oil prices were high in 2020, averaging $64 a barrel in January. But they fell sharply in the second quarter, closing at about $9 a barrel in April 2020, when the price of West Texas Intermediate (WTI) crude oil fell to a negative price around -37 dollars a barrel.By June 2020, the price of Brent crude oil exceeded $40 per barrel, and by the end of 2020, it rose to $50 per barrel. In March and April 2021, prices rose to $65 per barrel due to rising oil demand due to an increase in the number of vaccinations and an increase in overall economic activity worldwide.The price increase also reflects supply constraints from the Organization of the Petroleum Exporting Countries (OPEC) and OPEC partner countries. OPEC restricts oil production due to lower demand during the pandemic. At its meeting in April 2021, OPEC announced that it would start increasing oil production, with each adjustment being no more than 0.5 million barrels per day.According to the EIA forecasts, the average price of WTI oil in 2021 will be $59 per barrel, and in 2022 oil will be at the level of $57 per barrel.Four reasons for volatile oil pricesPreviously, oil prices had predictable seasonal fluctuations. They rose sharply in price in the spring, as oil traders expect high demand for cars for the summer holidays. When demand peaks, prices fall in the fall and winter, especially if the winter is warm.Oil prices have become unstable due to factors affecting oil prices. The coronavirus pandemic has led to a sharp drop in oil demand. This offset three other factors affecting oil prices: rising U.S. oil production, declining OPEC influence, and a stronger dollar.Slowing global demandThe EIA estimates that global demand for oil and liquid fuels in 2020 was 92.2 million barrels per day. This is 9 million barrels per day lower than in 2019. Demand is expected to grow by 5.4 million barrels per day in 2021 and another 3.7 million barrels per day in 2022.US oil production growthProducers of shale gas and alternative fuels such as ethanol in the US have increased their supply. They slowly increased the supply, maintaining prices high enough to cover the cost of developing new fields. Many shale gas producers have become more efficient at extracting oil. They found ways to keep the fields open, saving on the cost of closing them. This growth began in 2015 and has since affected supply.In August 2018, the United States became the world's largest oil producer. In September 2019, U.S. crude oil production rose to a record 12.1 million barrels per day. For the first time since 1973, the US exported more oil. In February 2021, U.S. crude oil production averaged 9.9 million barrels per day, down 1.2 million barrels per day from January. The EIA estimates that U.S. crude oil production rose to 10.9 million bpd in March and nearly 11.0 million bpd in April.U.S. crude oil production is estimated to average 11.3 million barrels per day in the fourth quarter of 2021 and increase to 11.8 million barrels per day in 2022.Reducing the influence of OPECAmerican shale oil producers have become more powerful, but they don't act like an OPEC-type cartel. To maintain market share, OPEC did not cut production enough to set a minimum price level.OPEC's leader, Saudi Arabia, wants higher oil prices because it is a source of government revenue. But it must balance this with the loss of market share to American and Russian companies.Saudi Arabia does not want to lose market share to its main rival, Shiite – led Iran. The 2015 nuclear peace Treaty lifted 2010 economic sanctions and allowed Saudi Arabia's biggest rival to export oil again in 2016. But that source dried up when President Donald Trump reimposed sanctions in 2018.The rise in the value of the dollarCurrency traders have been raising the value of the dollar since 2014. Many traders use the dollar as a safe investment in times of economic uncertainty. For example, the value of the dollar rose by 30% between 2013 and 2016 in response to the Greek debt crisis and Brexit. From March 3 to March 23, 2020, it grew by 8.4% due to the coronavirus pandemic.All oil transactions are paid in US dollars. Most oil-exporting countries link their currencies to the dollar. As a result, a 25% rise in the dollar offsets a 25% drop in oil prices. Global economic uncertainty keeps the US dollar strong.Brent oil price forecast for 2021 and 2022On the weekly oil chart, a large bullish "Wolf Wave" model was formed with the aim of working out the model at the level of $120 per barrel. As we can see, the potential for continued growth is still there. Moving averages indicate the presence of a short-term bullish trend in oil. Prices broke through the area between the signal lines up, which indicates pressure from buyers of "Black Gold" and the potential continuation of the growth of the asset value from the current levels. At the moment, we should expect an attempt to develop a correction and test the support level near the area of $68.50 per barrel. Further, the continuation of the growth of the oil exchange rate in the region above the level of $ 85 per barrel in 2021 and $ 120 in 2022.Read more: How to determine the beginning of the movement of the "bull" market?An additional signal in favor of the rise in quotations and prices for Brent oil will be a test of the support line on the relative strength indicator (RSI). The second signal will be a rebound from the lower border of the inverted "Head and Shoulders" reversal pattern. Confirmation of the rise in quotations will be the breakdown of the resistance level and the closing of Brent prices above the level of 70.55, as we can see, buyers can not break through this area in any way.Thus, the Brent forecast for oil prices for 2021 and 2022 suggests an attempt to develop a correction and test the support level near the area of 68.50. Further, the continuation of growth with a goal above the level of $85 per barrel in 2021 and $ 120 in 2022. A test of the trend line on the relative strength indicator, as well as the formation of a large inverted "Head and Shoulders" model, will be in favor of the rise.Oil price forecast for 2025 and 2050The EIA predicted that by 2025, the nominal price of Brent crude oil will rise to $66 per barrel.By 2030, it is expected that global demand will lead to an increase in the price of Brent crude oil to $89 per barrel. By 2040, prices are projected at $132 per barrel. By then, the sources of cheap oil will be exhausted, which will make oil production more expensive. By 2050, oil prices will be $185 per barrel, according to the EIA's Annual Energy Outlook.The EIA expects oil demand to stabilize as utilities rely more on natural gas and renewable energy sources. It is also assumed that economic growth averages about 2% per year, while energy consumption is declining by 0.4% per year. The EIA also has forecasts for other possible scenarios.Can oil cost $200 a barrel?Although it seems ridiculous now, there are situations in which the price of oil can reach $200 per barrel. The EIA forecasts Brent crude prices at $185 a barrel in 2050 if the cost of oil production falls and it displaces competing energy sources, but economic conditions could lead to even more price increases.In July 2008, oil prices reached a record high of about $147 per barrel. In December, they fell to about $40 per barrel, and then rose to $123 per barrel in April 2011. The Organization for Economic Cooperation and Development (OECD) previously predicted that the price of Brent crude could rise to $270 a barrel on rapidly growing demand from China and other emerging markets.The price of oil at the level of $200 per barrel can change consumer consumption. The use of oil as an energy source has led to climate change. There is an opinion that high oil prices lead to a "drop in demand". If high prices persist long enough, people change their buying habits. The drop in demand occurred after the 1979 oil shock. Oil prices have been falling steadily for years.The $200-a-barrel oil price forecast seems disastrous for the American way of life, but people in Europe have been paying high prices for years because of high taxes. As long as people have time to adjust, they will find ways to live with higher oil ...
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