Downtrend On The Crude Mark
Alpari | Aug 10, 2016 06:36AM ET
Last week the downtrend on the crude oil market was broken, and crude prices went up. The prices of WTI rose 4% and reached $42.7/bbl. On August, 8, the price of WTI reached its weekly high of $42.81/bbl. However, the next day it failed to remain at that level and plunged 0.25% to $42.7/bbl. The important resistance level is located at $45/bbl. Nevertheless, WTI price did not yet reach this level.
The price of Brent crude also rose 4% last week and reached $44.97/bbl. We notice that the spread between the prices of Brent and WTI broadened to $2.27, while earlier it did not exceed $1-1.5. This reflects the high level of volatility on the crude oil market.
We can say that the downtrend of the two previous weeks is likely to be broken. However, Brent failed to remain at its weekly high of $45/bbl. If Brent manages to remain above this level, it would reach the next strong resistance level of $47-48/bbl.
Commercial oil stocks in the US rose by 1.67m bbl, while the market expected a decrease of 2.26m bbl. Nevertheless, Baker Hughes reported that the number of active drilling rigs rose only by 7 units last week. The data is ambiguous. However, some media sources reported last week that OPEC is likely to consider the opportunity of freezing of crude production at the levels of early 2016. But the representatives of OPEC did not confirm or deny this news.
We expect the prices of Brent and WTI next week to be in a range of $41-45 bbl.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.