Oil price drops following sustained high

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In the first half of the tenth trading week commodity markets saw a drop in oil prices after previous highs, when the price of North Sea Brent crude rose above US$ 70 per barrel. Brent crude even traded at US$ 71.38 per barrel, which was last reached in January 2020. Prices rose after Saudi Arabia said that on Sunday that its oil facilities were attacked with missiles and drones with a Houti military spokesman taking responsibility for these attacks.

However, on Monday 8 March, oil trading finished the daily commodity market trading session with lower prices. On 9 March at 7:17 am CET, West Texas Intermediate (WTI) light crude oil traded at US$ 65.15 per barrel on the NYMEX (New York Mercantile Exchange) commodity market with current daily growth of +0.15%. At the same time the European counterpart to WTI oil, North Sea oil Brent, was trading on the Intercontinental Exchange Europe (ICE) commodity market at US$ 68.45 per barrel, with a daily appreciation of +0.31% so far. However, during the day the trend changed from bull market to bear market.

On 9 March at 8:44 am CET, Brent North Sea crude oil traded on the ICE commodity market at US$ 67.87 per barrel, with a daily decline of -0.54%. However, according to technical analysis data, this current price still represents an increase of +31.24% since the beginning of this year. In an annual comparison, an increase in the price of Brent crude oil represents an increase of +62.4% over the last 52 weeks. At the same time, the decline in the price also affected the US WTI oil, which traded on the NYMEX commodity market at US$ 64.62 per barrel with the current daily decrease of -0.66%. The comparison of the price of WTI crude oil shows that since the beginning of this year the price has increased by +32.92% and in the annual comparison the WTI crude oil has increased its value by +73.33% in the last 52 weeks.

According to analysts and financial strategists, a continuing trend of a slight weakening of oil prices can be expected with normal volatility of possible short-term price appreciation, for Brent oil around US$ 70 per barrel and for WTI oil analysts see a short-term average price limit of about US$ 65 per barrel. According to these experts, if there is no oil supply disruptions, either massive voluntary reductions in crude oil production or violent disruption due to attacks on oil facilities, massive terrorist attacks or natural disasters, under the influence of the strengthening of the US dollar (USD) exchange rate, a significant increase in oil prices on the global commodity market in the short to medium term investment horizon cannot be expected.

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