The price of oil has managed to get out of the short-term range and out of the long-term downward channel, passing even over the 200 and 50 period averages. The sentiment has helped the movement that remains at this stage bullish for the black gold. Today, Saudi Arabia sacked its energy minister and quickly appointed a new face as his deputy. In his first speech, the new energy minister said the reduction policy will continue, with hope for consensus during this month’s OPEC and OPEC +.
We expect the price to confirm its upward direction, with an attempt to attack the area at $58.56 for long-term movement to levels at $60.45. In the event of a failure in the first zone, we will expect short term depletion of the bulls, and the bears will bring the price back to the support zone at $56.67. The psychological level of $60 will also be key to watch.
Technically speaking, we have the prerequisites for upward movement, and the foundation also supports this idea. Lower oil stocks indicate high demand and reduced fears of a global recession. Positive sentiment among OPEC also helps to value and inspire confidence in the organization. Positive developments around trade negotiations also indicate strong support.
Alternatively, in the event of a deterioration of the foundation and subsequent technical confirmation, we would expect the price to return to the $56.67 area, and depending on the deterioration of the sentiment, return within the downward channel at a price of $55 per barrel.
Trader Martin Nikolov