Barrel of oil set to go to $100

By 06/10/2021News

Gold  1753,555

EURUSD   1,159

DJIA  34091,50

OIL.WTI  79,135

DAX  15155

The oil market is already up 60% since the beginning of 2021. The overbought nature of this asset is already beyond all bounds and technically there should be a reversal somewhere, but in this situation the trend is likely to continue.



The energy crisis is escalating. Gas has become so expensive that it will soon become cheaper to heat with oil-based products. The increase in production, together with the start of the heating season, has additionally made adjustments to the oil price.
All would still be well, but on Monday after the OPEC+ meeting it became clear that no build-up beyond current levels would take place any time soon. Moreover, there was not even an official statement on the current situation after the meeting. Everything remains at current levels and OPEC+ is happy with this situation. At least there were thoughts that OPEC+ would not allow oil to rise too much, so as not to taunt competing shale oil companies in the US.
The picture ahead is not yet very clear as to what levels oil could rise to. In the short term, fuelled from all sides, prices could fly quite high. As high as $90-100/bbl. Such high prices would in any case put pressure on the economy. Because of this pressure, demand for oil is likely to fall, and the price of black gold will fall as a result. For commodity markets, and oil in particular, there is a very good saying said by a fairly respected analyst – “High prices are the best cure for high prices”. And it almost always works.
It is also worth remembering that high oil prices have a direct impact on pricing. So high prices are accelerated inflation. Inflation in developed countries is now quite high and no one wants to see it go any higher.

11.00 EU retail sales YTD
14.15 ADP US private sector employment report for September

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.