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In the Middle of Oil Bull Run

Olymp Trade

Oil quotes are getting close to the level of $71/barrel. The market looks very bullish, and maybe it is locally overheated. If buyers do not overcome $71 on their way to $72 and above, the price is very likely to decline to $70. In case of unforeseen fundamental factors: for example, new tweets from President Trump, it is quite possible to fall down to $69, which looks impregnable so far.

Medium-term will depend on the actions taken by the United States and OPEC+ country leaders. In the United States, the NOPEC (No Oil Producing and Exporting Cartels Act) law may be passed against the cartel. Saudi Arabia, for its part, threatens to stop selling oil for dollars. However, all this may just be a mutual bluff.

For now, OPEC and its allies are doing well. In March, their total oil production fell for the fourth month in a row, dropping by 295 thousand barrels per day to 30.385 million barrels. The imbalance in the production is brought about by blackouts in Venezuela. Because of them, oil production is less than 600 thousand barrels per day.

In addition to the fact that America is increasing its own production, problems may arise from a different geopolitical pole. Russian Energy Minister Alexander Novak said last Friday that Russia could increase oil production if the OPEC + agreement will not be extended until July 1. Meaning countries still have something to agree on.

Olymp Trade Review

Source: https://olymptrade.com/
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