Oil surged amid soft dollar
Oil is edging higher due to the overall risk-on sentiment and a weaker US dollar. Jump in to get the tech tips!
Wall St banks forecast oil at $100
Information is not investment advice
What happened?
Financial giants such as JPMorgan and Goldman Sachs anticipate crude oil to skyrocket as high as $100 as the global economy rebounds. Oil prices haven’t been at such a high level since 2014. What are the reasons behind banks’ optimism? The banks believe that Biden’s fiscal stimulus of $1.9 trillion will boost consumption and thus increased demand in combination with massive output cuts would fuel the recent surge in oil prices. However, there is still much depends on OPEC+ decisions on oil supply.
Biden’s green agenda
All these banks’ forecasts are good, but won’t oil be replaced by alternative energy resources? The US President committed to fight climate change and support the development of electric vehicles. His goal is to make the US carbon-free by 2050. It seems that there is no place for crude oil in our future. Yes, but JPMorgan assured: “We’re going to be short of oil before we don’t need it in the years to come. We could see oil overshoot towards, or even above, $100 a barrel.” Besides, Goldman Sachs emphasized that Biden’s stimulus will be directed to middle and low-class people, who mostly drive petrol-drive cars, not Teslas.
Technical analysis
Brent crude has gained more than two-thirds so far since October and reached $63 a barrel. The price has broken through all weekly moving averages, confirming an uptrend. Now the price is just under the key psychological level of $65.00. If it manages to break it, the way up to the high of January of the last year at $70.00 will be clear. Support levels are at the 200-week moving average of $59.00 and the low of late January at $55.00.
The current ᏟᖴᎠ for Brent oil is BRN-21J, which expires on February 26.
Kseniya Medik
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