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Oil Finally Found the Bottom

Olymp Trade

Oil quotes have experienced a serious fall. Since last Thursday, Brent has fallen more than $8, or 12%. Thus, the price returned to the zone of $60-63 per barrel, where it was traded from mid-January to mid-February of current year. Correction started at $60.5 and at the moment the quotes are moving up into the direction of $63 level. If bulls manage to overcome this mark, then it is quite possible that the correction may last until $ 65, taking into account the current volatility. However, consolidation in front of $63 is a `more likely scenario, which leads to lateral flat movement in the borders of $60-63. At least until the fundamental background changes.

The main reason for such a serious fall in the market is the actions of President Donald Trump. This time he managed to crash the oil market without his usual twitter rant. On June 10th, the president has promised to introduce a 5% tariff on Mexican imports. Moreover, the tariff will grow up to 25% until the flow of illegal migrants across the US border stops. Increasing tensions, first with China and then with Mexico, which is one of the largest US trading partners and a major supplier of oil, is regarded by the market as the biggest current risk. Taking into account the policy pursued, extra costs due to imposed duties are most likely to fall on the shoulders of the common United States consumers.

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Source: https://olymptrade.com/
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