Oil: rally continues, prices at their highest level since 2014Dwain Ross 14 / November / 21 Visitors: 54
Thanks to the Ukrainian crisis, oil prices continue to rise: yesterday, WTI closed trading in New York above $88 per barrel, the highest closing level since 2014 (+1.5% to $88.15 per barrel). A new high since October 2014 is also for Brent, which, after rising above the resistance of 88.84, falls back to $88.28 today. Crude oil left behind a sixth consecutive week of gains for the Bloomberg Total Commodity Index (1.7%), which rose to its highest level since 2014 thanks to strong gains in the energy sector (7.5%).
Although oil closed positively (Brent 1.1%), analysts at MPS Capital Service note in their weekly analysis, most of the performance of the sector is accounted for by US natural gas (22.6%), prices of which benefited from a wave of frost that hit the north the east of the country.
Tomorrow's OPEC+ meeting: what to expect
Prices continue to benefit from tensions between Russia and the West, from strong global demand, which has also added an additional component in recent days associated with a wave of frost that is hitting the northeast of the United States.
Tomorrow, Wednesday, February 2, at the OPEC+ meeting, it is planned to determine production levels for March. While the price of oil is very high, from statements made by some delegates, there appears to be no intention to increase production beyond the already planned 400,000 bpd after a record 10 million bpd cut during the pandemic. One of the reasons for this may be the current difficulties on the part of some members (including Russia) regarding the already determined growth rates.
Oil price estimates
On the technical front, MPS Capital Services analysts point out that a break of resistance at $88.84/b raises the risk of a continuation of the advance towards the next one at $96.75/b (April 2013 low) if the signal of strength is not refuted by yields below 88.84 on short notice (down this week).
As for indicators, both daily and weekly stochastics formed positive divergences with prices, increasing the chances of profit taking on the trend.