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Whats happen and what to expect from oil market

Varchev Finance - WTI perspectives

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Sustainable growth in US shale oil production is likely to offset global production problems over the next few months. The moods of the oil market are heavily influenced by the growing demand and supply gap for oil. On the one hand we have an escalating trade war and currency crisis in Turkey that make large companies consuming oil to reduce stocks in order to protect themselves from possible losses and on the other, appreciating US dollar, which further drives the price down (albeit purely correlative).

Despite the above-mentioned factors, commodity analysts point out that the booming shale deposits in the United States is the main factor leading to record yields and US oil reserves.

On Tuesday, the US Petroleum Institute (API) reported that US oil stocks increased by almost 4m. barrels, and a little earlier today it became clear that the figure is well above this: + 6.805mil. barrels.

Together with the weakening economic environment, the price of oil collapsed and came out of the main upward trend.

Technically, the price is on a support that will most likely keep the price, but in the short run. If shale crops continue to rise and the economic environment stays at the current level, the area around $ 62 per barrel remains the most likely scenario. Both the long and short positions of the current levels are too risky.

Source: CNBC


 Trader Petar Milanov

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