News

Bitcoin started the week on the rise. On Tuesday, the price rose above $66,000 per coin for the first time since 20 October. But by the end of the day, the major cryptocurrency had lost nearly all of its ground, falling below last month’s extremes. Is this a false hope or the start of the next rally?

BTC/USD

From a technical point of view, a pullback below the highs of October 20 is a sign of a false breakout of historical resistance. That is, the buyers have not yet had enough strength to break through.
For further growth, it is important for the price to consolidate above the level of $65,000, ideally confirming it as support. Then it will be possible to talk about conquering new tops.
If bitcoin-bulls do not have enough forces to consolidate now, a rollback downwards is likely. Here targets should be oriented on borders of recent consolidation. The first would be near $64,000, the second around $60,000 per coin.
As for the future fate of the crypto market, almost no one doubts its growth. Medium-term catalysts for bitcoin’s strength remain rising inflation and expanding institutional adoption.
Analysts and inflationists, including investor Peter Thiel and JP Morgan Bank, argue that inflation is unlikely to be temporary, as all major central banks assure. Investors, realising this, are choosing cryptocurrencies to both diversify and hedge their portfolios. And that is a bad sign for the economy; the flight to the new asset class could become a long-term trend.
Thankfully, institutions have a tool for that. The approval of bitcoin futures-ETFs has untied the hands of many institutions and one step closer to allowing funds to spot BTC.
Against this backdrop, the immediate target for bitcoin would be near the next psychological level of $70,000. In the medium term, we could be talking about a rise towards $100,000 per coin if the rally continues.

14.30 US Consumer Price Index for October
14.30 US initial jobless claims

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.

The long-awaited Bank of England meeting last week turned out to be a disappointment for the pound. The interest rate was not raised: out of nine members of the Monetary Policy Committee only two voted for a tightening. In this backdrop, the GBP/USD pair lost more than two pips by the end of the week. How low can sterling fall now?

GBP/USD

The possibility of a rate hike by the Bank of England was raised in mid-October. Central bank governor Andrew Bailey said that the rapidly rising inflation rate might require drastic measures.
Since then the GBP/USD pair has risen by almost two figures on expectations: from values near 1.3600 to the area above 1.3800.
However, many realised that Andrew Bailey would find it difficult to persuade Monetary Policy Committee members to agree to a rate hike in November. The economic recovery still looks rather shaky and the labour market has not yet returned to pre-pandemic levels.
For example, Silvana Tenreiro, as well as other central bankers who voted against a rise, said that the employment situation must continue to be monitored. On 30 September, the furlough programme, which was in place during the pandemic, ended and it is still too little time to see how this will affect the labour market.
As for inflation, it is now mainly caused by rising energy prices. The situation is very similar to what happened in 2008 and 2011. Most likely, as before, this will not lead to a sustained increase in the consumer price index.
As a result, market expectations did not come true on 4 November and the pound collapsed. GBP/USD fell almost to the September lows in the area of 1.3400. The main question on the table now is: how long can the weakening last?
From a fundamental point of view, the collapse in sterling was caused by disappointment after unreasonable expectations. This is a typical news reaction. And given that there is a chance of a rate hike in December, there may not be any further GBP/USD fall.
From the technical point of view, there is a strong support (mirror level) near the lows of September 30 (area of 1.3400). And if it holds, the pair may move to recovery.
But, in case of breakdown of 1.3400 and fixation under it, the next southward target for GBP/USD could be the area of 1.3100.

07.45 Swiss unemployment rate for October
11.00 Eurogroup meeting

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.

EUR/USD added more than a figure on Thursday, rising to almost 1.1700 after the ECB meeting. The central bank expectedly kept its monetary policy unchanged. So why did the single European currency strengthen and how long can the rise continue?

EUR/USD

The ECB meeting took place without any changes to monetary policy parameters, as expected. In such a case, the central bank is usually expected to make a statement, this time about inflation and related plans.
The European central bank is now continuing its ultra-soft monetary policy. Apart from the 0.0% interest rate, the Pandemic Emergency Prediction Program (PEPP) in the region remains in operation. The printing press is running at full speed to keep the economy going.
That would be fine, but inflation, which for years was teetering on the brink of deflation in the Eurozone, has soared to unprecedented levels. In September it rose to 3.4% and is forecast to be 3.7% in October. With a target of 2.0 to 2.5%.
Usually in such situations central banks start to tighten monetary policy. But so far, quantitative easing has not really been curtailed and there is no hint of a rate hike.
Why? Because some ECB members still believe that the rise in inflation will be temporary, as it is mainly caused by supply chain disruptions.
At the press conference after the meeting, ECB President Christine Lagarde said that the entire meeting was devoted to the topic of inflation. It was discussed from different angles and it was concluded that the consumer price index should be back to normal by 2022.
Why did the euro rise? Perhaps because before this week’s meeting the Euro had already fallen on expectations. Now it has regained its losses on the facts.
In addition, Christine Lagarde is expected to finally announce a tapering of stimulus in December, though PEPP is scheduled to end in March. In the meantime there is still little hope on the market that the ECB is underestimating the threats of rising inflation. Which means it could raise interest rates by the end of next year.
And what about the local targets? How long will the EUR/USD rise last?
The pair regained the weekly losses and approached a strong mirror resistance level near 1.1700. The price failed to rise above it in October. If a breakout fails this time as well, the EUR/USD might return to the low of the month near 1.1500.
In case of a breakdown and a consolidation above 1.1700, the pair will open the way for a further recovery. The nearest target would be the 1.1900 level.

02.30 Australian retail sales for September
11.00 Eurozone consumer price index for October

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.

WTI crude oil reached $85 per barrel on Tuesday before retreating slightly. The price has not been at this level since October 2014. What is driving black gold up and what are the next targets for a rise?

OIL.WTI

The price of oil has risen for ten weeks in a row, rising from $62 to $85 a barrel for WTI after a setback in August.
The main catalyst for the growth is now a lack of supply, although it seems that only recently the market was filled with concerns about demand.
Two weeks earlier, it was mainly rising coal and gas prices. China, the biggest exporter of black gold, started switching to oil as an alternative source of energy, driving up quotations. But China’s National Development and Reform Commission soon took up the cause and promised measures to bring coal and gas prices back to a reasonable level. The WTI rally slowed slightly but did not fall.
The global economy is now recovering. Energy demand growth in developed countries, including the US, is outstripping supply. Meanwhile, OPEC+, which wants to protect the market through its production cuts, is in no hurry to lift the restrictions. The cartel is currently expanding production by 400,000 bpd and does not yet intend to increase this figure. Now that the cold season is approaching, demand for energy is rising, and rightly so. Consumption is forecast to rise in November and December. The same applies to an increase in WTI quotations.
As for targets, the technical picture on the monthly chart shows a strong mirror level in the $85 per barrel area. If this level is broken, the next stop could be in the $97 – $100 range.An alternative scenario for WTI would be a rebound to $75-78, but that would require a change in fundamentals.
For example, OPEC+ could decide to expand production, which would increase supply. Or they might indicate that they intend to do so, and one expectation factor would be enough for a setback.
A second hypothetical hit could come from the demand side if fears about a global economic recovery are revived. For example, if US GDP data this week is weaker than forecast.

16.00 Bank of Canada interest rate decision
17.00 Bank of Canada press conference

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.

The Nasdaq index fell on Friday after weak quarterly reports from Intel and Snap pulled the tech sector down. There is worrying news hanging over Big Tech. Will the US100 fall continue and what should traders watch out for the week?

US100

The first factor unfavourable to investor sentiment was Intel’s weak report, after which shares plummeted by almost 12%. The company failed to meet sales forecasts, citing a chip shortage problem.
We should immediately take into account the fact that the technology sector reports have only just begun. Which means that global issues such as chip shortages are likely to have had an impact on the financial results of other companies in the industry as well. Their reports are yet to be seen by the market.
The second worrying sign came from Snap, owner of the social network Snapchat. The change in privacy terms that Apple introduced on iOS devices has affected the company’s ability to target ads. Against this backdrop, Snap’s shares plunged almost 27%.
Apple’s privacy story casts a shadow over Facebook and Twitter, which generate revenue from targeted advertising. This impact is likely to find expression in the financials of the companies, whose quarterly reports are due on 25 and 26 October. Their shares have already fallen behind Snap on expectations.
Further growth of the Nasdaq index is therefore in question. The situation on the chart looks more encouraging. But quarterly reports from Big Tech companies could break the technical picture. And until they arrive, investors are likely to be cautious.
Nevertheless, the picture so far on the US100 daily timeframe is as follows. After the double-bottom pattern (range 14500-14900), which reversed the correction of the index in September-October, something looks like a bullish flag. Though, of course, it is a bit crooked, with not a very nice handle, but, let’s take it under consideration. Now there is a pattern body in the range of 15300-15500, which means that there is a potential for recovery of the index to the all-time high.
Whether or not these technical prerequisites work out, we will see on the reaction to the Facebook and Twitter reports on October 25 and 26.

10.00 German IFO Business Climate Index for September
15.00 Address by Bank of England Governor Tenreyro

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.

The Japanese yen has fallen for the third month in a row. The USDJPY has reached the highs since mid-2017 with strong resistance in the 114.00 area. Will the strengthening continue and what targets can the pair reach?

USDJPY

The strength of the USDJPY pair since the start of the year has been supported by two factors: a rise in the dollar index and a fall in the Japanese currency. While the former was dominant at the start of the year, the Yen has now rapidly collapsed.
The USD was in demand as a safe haven asset to which market participants fled from the threat of a pandemic coronavirus or from uncertainty. Rising inflation was adding fuel to the fire, which should have prompted the Fed to tighten monetary policy.
However, it is now almost clear what the Fed will do – the market is preparing for the announcement of a tapering of its bond buying programme in November. And against the background of the quarterly earnings season, demand for the safe-haven dollar has also weakened.
For its part, the yen is also traditionally seen as a safe haven asset. And when risk appetite rises, as it is now, no one is interested in it.
Moreover, Japan has a negative interest rate and a long-running printing press because of years of unsuccessful deflation. Bank of Japan Governor Haruhiko Kuroda says it will not be possible to deal with this problem before the end of his term (which is 2023).
What does that mean? The yen has no drivers for growth, especially with the prospect of monetary tightening by the Fed. But Japan does have cheap money, which is great for a Carry Trade strategy. Big players take currency in Japan and invest it in high-yielding assets such as US equities. And they make money on the difference between the lending rate and the yield received.
Thus, on the yen side we have no growth drivers, such as risk aversion. And we have catalysts for a fall: a cheap currency and increased demand for high-yielding assets. It is not certain that this situation will change any time soon. Therefore the fundamentals for a weaker yen (USDJPY growth) remain in place.
And now about the targets. Technical analysis has not been cancelled and there are two interesting facts.
The first one is the resistance level at 114.00. Today a pullback started from it, which was probably caused by a partial profit taking. What is important is for the price to break this level and consolidate higher, ideally confirming the pullback as support.
The second is a bullish flag on the weekly chart, which started to form at the beginning of 2021. It is a trend continuation pattern and the shaft of the second flag is now looming. If it works out its potential, the USDJPY will have scope for a move to 118.00, which by the way, is the high of December 2016.
As we can see, there are preconditions for growth. The main thing is to wait for a breakdown and fixation of the pair above the level of 114.00.

08.00 UK retail sales for September
14.30 Canadian retail sales 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.

The Bank of England is seriously concerned about raising interest rates. On Sunday, its chairman Andrew Bailey stressed, not for the first time, that the central bank “will have to act” as rising inflation becomes a problem. What does this mean for the pound and the traders who trade it?

GBPUSD

Since last week the Bank of England has been actively signalling to the market that it is time to raise rates. Although everyone has inflation on the rise, even the Fed is in no hurry to raise rates (but is preparing to roll back bond purchases).
And while the Fed and ECB argue that rising prices will still be temporary, Andrew Bailey says that inflation above 2.0% is worrisome, which means it must be dealt with to prevent such levels becoming chronic.
The Bank of England interest rate is now at a record low of 0.10%. But the markets already estimate a 90% probability of a 25 basis point increase at the November meeting. By February the rate could rise by 50 basis points.
And how is the pound reacting to this? It would seem that with such hawkish statements, sterling should be on the rise. And it is. But somehow it is sluggish and mostly at the expense of a falling dollar index.
So what is it? Judging by the statements of the other members of the Monetary Policy Committee, not everyone supports such a radical Bailey plan. This means that the Governor of the Bank of England will have to work hard to persuade his colleagues to vote for a rate hike.
And even if that happens, it will probably not be unanimous. But so far, judging by the reaction of the pound, market participants prefer to proceed cautiously.
What should traders do now? Based on the technical picture, GBPUSD still has room to move up to the 1.4000 area if it manages to pass the current resistance near 1.3800.
Above the level of 1.4000 the pair has not been above since mid-June, and if it manages to consolidate above this level, the next target for strengthening will be near the highs of February and May (~1.4200).
And if the Bank of England does indeed raise the rate at the next meeting, sterling could go up in earnest. But, let’s not get ahead of ourselves, there is not much time left until 4 November.

08.00 UK consumer price index for September
11.00 September Consumer Price Index for the Eurozone
14.00 Canadian September Consumer Price Index

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.

With inflation at its highest since the 1980s, the gold metal serves as the last bastion against growth. Indeed, oil, metals, timber, foodstuffs are getting more expensive. Anything. Except the asset, which, as we are taught in books, must grow first. And not just because of inflation, but because of the huge issue of paper money. Why is this happening?

XAUUSD

It seems to us that there are two main reasons.
1. How is the price of gold formed? It is based on futures contracts. And also paper gold, in the form of ETFs, which are traded on stock exchanges.
What is wrong with this pricing? The point is that you cannot buy physical gold on an exchange. You just buy receipts. And the volume of receipts traded is a hundred times higher than the volume of physical gold that is produced in a year. Of course this is completely absurd. If the buyers would demand to exchange the given volume of paper gold for the physical metal, the price of the latter would increase by 10 times.
However, ETF holders cannot demand this metal. States and central banks do their best to keep the price of paper gold from rising. By the way, it is easy enough to do. You can sell an unlimited number of futures contracts on it. It’s just a receipt, not a real asset.
Why do the governments of the world’s major countries and central banks need this? If you let gold float freely and stop manipulating its price, the following will happen. The price of gold will not just increase several times. Not only that, but buyers will want the physical metal. And then it will quickly become clear that there is far less of it (even at the higher prices) than the quantity required for delivery.
But the most important thing will be (for governments) something else. Investors will realise how much paper money has depreciated in real terms. And they will start to sell off government bonds by investing in rising gold. And this threatens to cause huge problems with the servicing of government debt.
2. Of course, bitcoin is also to blame! In fact, investors are exchanging old gold for new digital gold. And with the introduction of bitcoin ETFs, this process only threatens to accelerate. Most likely, this will not lead to a drop in the price of the yellow metal. But it will make it easier to manipulate its price.

04.00 China retail sales for September
04.00 China’s GDP for September
15.15 US industrial production 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.

The first cryptocurrency has risen 30% in the last month, coming close to the $59,000 per BTC level. There are 2 reasons contributing to this move. The day before yesterday we told about one of them. Today the second one is on the line.

BTC

Many of us have probably heard that BTC is rising in value amid talk of the approval of the first cryptocurrency ETF by the US Securities and Exchange Commission (SEC). The latter has refused for 3 years to allow at least a dozen different companies to launch ETFs.
Apparently the situation has now changed. This is evidenced by 2 factors. First, SEC Chairman Gary Gensler announced that it is possible that an ETF will be allowed to launch, based on bitcoin futures already traded on the Chicago Exchange in the US.
And the second factor is the rapid growth of BTC. Apparently, insiders are buying the first cryptocurrency in huge volumes, as they know about the approval of a bitcoin ETF launch in the near future.
Why is this so important for the market? The fact is that a huge number of potential investors in the first cryptocurrency are still standing on the sidelines. They are simply not ready to put money into cryptocurrency exchanges. Or to open cryptocurrency wallets. These are huge risks. An exchange can be hacked by hackers. And the cryptocurrency wallet could be zeroed out through phishing or its password could be lost.
The launch of ETFs removes these risks. Investors will be able to buy “paper bitcoin” the same way they buy “paper gold” or ETFs on stocks. And that’s hundreds of millions of investors around the world.

What’s more! For many, the following strategy becomes available. When once a month from each paycheck, a portion of the money is put into a specific ETF, such as SPY. The strategy is extremely popular. It ranks first in terms of simplicity and the path to financial independence.
Now let’s imagine what would happen if 10 million investors started buying $100 or $1000 ETFs once a month. That’s $1 billion or $10 billion. And so every month, year after year. The numbers are simply astronomical. In such a scenario, a price of $1 million for 1 BTC in 20 years doesn’t seem too high anymore.

14.30 US retail sales for September
16.00 US University of Michigan Consumer Confidence Index

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.

This is a question that increasingly interests trend-following traders. And it is increasingly frightening for bears holding short positions with shoulders. It would seem! Just over a year ago we saw black gold at minus $37 a barrel. And analysts warned that we might never see a $50 price again.

OIL.WTI

Black gold is always ready to surprise. And it is least interested in analysts’ opinions. WTI crude is close to the highs seen back in 2014. What can we expect next?
A year ago, the answer was known. For any surge in the price of black gold, there was a surge in oil production by shale producers. The beauty of shale production is that it is possible to both freeze operating wells and reopen them quickly enough.
The situation today is different. If you pay attention to the number of open rigs, you can see that there are half as many as there were three years ago. At that time, the oil price was at about the same level.
Most likely, the shale producers have realised that as soon as they ramp up their oil output hard, there is a collapse to $30-40 a barrel. Of course, nobody wants that. The price war can’t go on for long. Well, or it can, but there are fewer survivors (I mean primarily the American and Canadian shale companies that are indebted to them). This is why shale producers do not want to hinder further growth of oil prices right now.
There is a second important point. $80 per barrel of WTI oil today is not at all the $80 that companies were getting three years ago. Inflation in logistics, industrial equipment and wages is much higher than consumer inflation of 5% in the US. Which means that part of the price increase is based on that factor alone.
In the first quarter of 2022, especially in the event of a cold winter in the Western Hemisphere, we could see the bulls attempt to push prices to $100/barrel, to remove a huge amount of stops. That will probably be the limit of this oil rally.

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.