Crude oil after reached the highest price of $93 in February as the market has weighed the ongoing tensions in East Europe with the resumption of Iranian nuclear talks as factors contributing to the sharp decline in oil prices early this week.
According to French President Emmanuel Macron, he received assurances from his Russian counterpart Vladimir Putin that he would not escalate the situation with Ukraine further. However, Moscow cast doubt on Macron's comments.
Additionally, Iran’s nuclear talks appeared to gain momentum and the possibility of more Iranian oil comes as global supply has increasingly been unable to keep up with surging demand from economies emerging from the pandemic.
The price of oil, natural gas, and metals has surged in recent weeks amid fears that Russian forces will invade Ukraine, which could trigger retaliatory sanctions from the U.S. Russia has repeatedly denied any such plans.
Due to outages in Libya, OPEC+ is struggling to meet its pledged output increases, and traders are awaiting how much U.S. shale patch production will increase this year.
My point of view, there is a lot of geopolitical risk priced into crude at the moment, so any improvement, however small, could reduce that premium. A massive sell-off is not likely to occur in crude unless something concrete happens, but if nothing worse happens crude will drop below its highs.
Trade recommendation, oil investor may open
- Sell position a level of $89.50 stop-loss at $91.50 and take profit at $87.50
- Buy position a level of $87.50 stop-loss at $85 and take profit at $92
[10:46 am, 09/02/2022] +855 98 823 823: Kosol. It is better to explain Shale oil bit so that reader can observe the current situation of so called “oil war between US and Russia “as well. This is also geopolitical impact to oil price. This just my little comment on your tremendous report.
Analyzed by:Mr. Nhim Kosol Business Manager of Golden FX Link Capital
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