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FxWirePro: Bulls are back in Brent targeting $95 area

In July, we called on our readers to long Brent crude at the then current rate of $74.3 per barrel, with a target of $95 per barrel citing Middle East tensions, https://www.econotimes.com/FxWirePro-Long-Brent-targeting-95-per-barrel-as-geopolitical-tensions-intensify-in-Middle-East-1409049

However, as some of the key bearish fundamentals (Middle East truce, weaker demand from China and India due to respective slowdown in the economies, higher production in Saudi Arabia, Russia, Iraq, and UAE) clouded the outlook, in our last review, we urged readers to book the long positions at -$3.3 per barrel loss and wait for the opportune moment to re-enter positions. Brent crude declined to as low as $70.6 area before starting its recovery.

Another reason for our change in the outlook was prevalent for sellers around the $80 area, President Trump increase production rhetoric with $80 as the virtual ceiling, and declining long positions. According to Commitment of Traders (CoT) report, since February this year, speculators have reduced long positions by more than 200,000 contracts in the light sweet crude contract traded in NYMEX.

However, our latest calculations suggest that bulls are back in business as they defeated the sellers around $80 area. Brent is currently trading at $81.5 per barrel. Brent is now clearly targeting the $95 area. The recent comments from Saudi Arabia’s oil minister Khalid Al-Falih, where he suggested that the Kingdom is comfortable with the current level of production have significantly energized the bulls.

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