A price in the mid-$70-per-barrel range is a key area that oil has been unable to move past since 2014, writes Tom Essaye, founder of Sevens Report Research. It last touched $76 in November of 2014 and hit $74 in 2018, before falling promptly. As the economy reopens and oil being tight for the past couple of months, OPEC finally came up with a plan to increase its supply to meet the recent strong demand. Production has been running at around 6 million barrels per day recently.
Analysts are also concerned about the capacity of economic growth. Although the economy reopening is fueling a strong rally across multiple industries, there is no guarantee how long the growth will last. And when the time of a slowdown comes, crude oil demand will slip as well. “The [oil] rally has lost momentum amid the growing fundamental uncertainties,” Essaye says. “Energy markets are likely to trade sideways… until traders gain clarity on those new fundamental uncertainties.”
We love to hear new ideas from traders and want to know what you think!
If you like this topic and want to suggest future topics that you find helpful, let us know by clicking the ‘submit your feedback’ button below.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.
Nothing contained in this website should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.
