Indices and Stocks in the Red
The stock market has reversed, and now it’s going lower and lower…
Brent Will Reach $95
Information is not investment advice
What is happening?
The global energy crisis spreads around the globe. At the end of December, XBR/USD exceeded $80 per barrel for the first time since November, and in January, it even exceeded $85, also for the first time since November. On Friday, January 14, the price has reached $86, the highest point since October 2018.
Reasons for XBR/USD growth
It becomes evident that the possibility of additional supply of oil on the market in the short term may be less than previously thought due to significant underinvestment in the sector over the past six years.
At the end of last year, Russian oil companies stated that they were operating at the limit of their production. Moreover, OPEC + potential for production increase could be much less than the 4 million barrels per day growth planned in 2022.
According to the International Energy Agency data, the current shortage of supply in the oil market is 3 million barrels per day, and the expected growth in demand this year is 3.4 million barrels per day.
The second factor is that the Omicron strain is much milder despite being more contagious and may not lead to severe and long-term lockdowns.
According to these facts, there is a high probability that the deficit will remain in the short term.
Technical analysis
XBR/USD daily chart
XBR/USD has been moving in the ascending channel since March 2020. At the moment, it is a moment of truth for XBR/USD. If the price manages to hold above $85.5 for at least two days, it will reach the channel's upper border at $95, which is 161.8 Fibonacci level, without any resistance.
Otherwise, the price might head towards the bottom border of the channel. In this case, targets will be at $79, $77, and $75.5, which are 61.8, 50.0, 38.2 Fibonacci levels, respectively.
Similar
Will the US economy lead the world into a global recession?
Whenever inflation exceeds 4% and unemployment falls below 5%, the US economy enters a recession in two years.
Oil near $130 is a nightmare for inflation
Oil markets were under great pressure amid increased demand and falling supply. OPEC+ is unable or unwilling to achieve its self-imposed production targets and insists on limiting production increases by 400,000 barrels per day despite rising prices.
Popular
EUR/USD climbed towards 1.07
Ichimoku Kinko Hyo CHF/JPY: The CHF/JPY pair is now trading within the Kumo…
How Will Amazon Price React To The Split?
What will happen? Amazon announced the company is going to make a 1 – 20 stock split on June 3 after the trading session close (23:30 GMT+3)…
Can a recession be avoided?
The pandemic continues hurting economic activity in China, the war in Ukraine is hitting the entire European economy, and the Fed's efforts to control inflation threaten to trigger a recession.
Choose your payment system
