Oil reaches six-year high

By 27/10/2021News
morning-news

Gold 1786,985
(-0,31%)

EURUSD 1,1602
(+0,09%)

DJIA 35663,50
(+0,03%)

OIL.WTI 83,85
(-0,70%)

DAX 15720
(+0,01%)

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

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.

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