Crude oil was one of the better investments since the beginning of the year, at some point gaining over 40 per cent. The rise in oil prices was mainly due to the reduction of production from Saudi Arabia and OPEC countries, as well as Russia, which declared that its production would soon be at the level declared earlier. Added to this was the ban on the import of Iranian oil and the possibility of blocking the Strait of Ormuz in retaliation.
Rising oil prices did not please President Donald Trump because it means that Americans have less money in their pockets because they have to spend more on expensive fuel. From here, Donald Trump has twice tried to intervene verbally to lower oil prices. The main goal was to put pressure on Saudi Arabia, an ally of the United States, to increase production. Each time it led to a temporary drop in the price of oil, and then we observed further increases and new highs.
Nevertheless, Trump reacted once again, after which crude oil prices have dived the most in two months. Speaking with reporters, the President of the United States said he personally insisted on OPEC to reduce oil prices. Trump added that he spoke with Saudi Arabia and other countries about increasing oil supply. Everyone was to agree, which led to a fall in oil prices.
Chart: Oil WTI, W1. Conotoxia trading platform.
As a result, we can spot a considerable reverse on the chart of oil which can lead to breaking the lower limit in the upward channel. If it is broken, it could end the whole bull market, which has been running since the end of last year. Meanwhile, the nearest support levels for a potential correction may be at the Fibonacci retracements. The main ones are 23.6 and 38.2 per cent at 60.85 USD and 57.37 USD respectively.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal Opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
