Oil price forecast indicates further growth

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Oil prices slightly increased on Tuesday’ 25 May 2021 but during the European Wednesday trading morning of May 26, the price of oil fell slightly. According to analysts, the previous rise in prices was due to increased oil demand due to the gradual easing of anti-coronavirus measures, especially in the US and Europe. Analysts also say that the current slight decline is the reaction of the market, with investors having concerns in regard to the higher production of Iranian oil on the commodity market, which could cause an excess of supply.

On 26 May 26 at 6:08 am CET, West Texas Intermediate (WTI) light oil traded on the New York Mercantile Exchange (NYMEX) commodity market at US$ 65.88 per barrel with the current daily decline of -0.32%. At the same time WTI’s European counterpart, Brent North Sea crude oil, traded on the Intercontinental Exchange Europe (ICE) commodity market at US$ 68.54 per barrel, with a daily decline of -0.16%. According to a technical analysis, Brent crude oil currently shows a year-on-year price increase of +67.74% in the last 52 weeks whereas WTI light crude oil even shows a year-on-year price growth of +73.87% over the last 52 weeks.

According to two market sources – citing data from the U.S. Petroleum Institute from 25 May – U.S. oil and fuel reserves declined last week. By the end of last week – 21 May – oil stocks fell by 439,000 barrels, according to sources who spoke on condition of anonymity, the API, however, have yet to comment on the situation. During the meeting, according to the DXY index oil prices were supported by the fall of the US dollar (USD) to a 19-week low compared to the basket of currencies, as inflation fears subsided. The weaker USD thus makes it easier for holders of other currencies to buy commodities valued in USD, such as oil or gold. Small movements in oil prices occurred as the market waited for weekly reports regarding the US oil reserves, which are expected to fall by 1.1 million barrels last week.

This week, which is the 21st one in 2021, indirect negotiations between the USA and Iran are to continue in Vienna, Austria. The talks were resurrected after Tehran and the UN nuclear agency extended an agreement to monitor the country’s nuclear program in the Middle East. Analysts and commodity market financial strategists said Iran could provide another one to two million barrels a day if the deal was reached and sanctions were lifted. “Crude prices are in wait-and-see mode until the fifth round of negotiations to revive the Iran nuclear deal are done,” said Edward Moya, senior market analyst at OANDA and added: “energy traders need to know how much Iranian crude is going to hit the market”. According to economic correspondents, the predictions of a gradual rise in oil prices on the world commodity market still apply.

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