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Bulls continue the oil price rally

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Oil broke out of the price channel, where it has been traded since February. The asset is retesting its upper limit at $68.0 per barrel. Brent updated a new annual maximum near $68.7. It’s 50% Fibonacci level, the middle between last year's high and low. The next Fibonacci level (61.8%) is located at $72.8. However, before getting to it, the bulls need to surpass the important zone of $70.5-71.

The channel was broken on excellent data on crude oil inventories in the United States. Although the consensus forecast indicated an increase of 0.3 million barrels, the Energy Information Administration reported a decrease of 9.6 million barrels. This is the largest decline since mid-2018. The market reacted with a momentum growth from $67.5 to $68.5. The second bullish momentum followed the US Federal Reserve’s decision to keep the current interest rate.

In the medium term, Morgan Stanley’s analysts raised its oil prices forecast for Q4 to $70-75 per barrel due to the expected oil shortage. Experts believe that the price increase was followed by an improvement in cost-effectiveness of oil refineries, which confirms the long-term nature of the current trend.

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Source: https://olymptrade.com/
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