There are telltale signs that crude oil prices could hold around the $80 per barrel level due to strong rising demand coupled with the OPEC+ meeting scheduled for November 4 that could further set the tone of the energy market.
Crude oil prices this week hovered between $80 and $85 per barrel.
Oil recorded the highest price since 2014 on October 26 – largely driven by a global supply shortage and strong demand in the US, the world’s biggest crude oil consumer, Reuters reported.
“Brent futures rose 41 cents, or 0.5 per cent, to settle at $86.40 a barrel, while US West Texas Intermediate (WTI) crude ended 89 cents, or 1.1 per cent, higher at $84.65.
“Those were the highest closes for both global benchmarks since October 2014,” Reuters said.
The London-based news agency quoted OANDA senior analyst Edward Moya as saying: “Crude prices still seemed poised to head higher, with some traders waiting for confirmation after both the EIA crude oil inventory shows demand for most products are headed in the right direction, while US production is stable and with OPEC+ sticking to their gradual 400,000bpd increase plan.”
Oilprice.com’s Tsvetana Paraskova on Tuesday said the demand for oil is on course to outweigh supply for the rest of the year, with some forecasting the price hitting three figures.
“Major investment banks and asset managers are already predicting $100 oil, especially if this winter turns out colder than usual,” she stated.
However, the price chart of crude is forming a signal of decline after creating a huge resistance level at $85 per barrel and a small resistance level at $84.50 per barrel, heading back to $80 per barrel.
For this week’s trading recommendation, investors should continue buying for the coming weeks, but if the price chart technically indicates a clearer picture to drop, it would be time to sell at $85 per barrel, setting the stop-loss function $91 per barrel and the take-profit at $75 per barrel.