Brent crude oil ended the trading session on Monday, rising to $ 43.46 per barrel. The quotes were able to recover, despite the fact that most of the day were in negative territory, continuing to develop the correctional impulse of the end of last week.
The prices were supported by the sharp weakening of the dollar. On the eve of the US currency index hit a two-year low, sagging 1% amid continuing concerns about the fundamental strength of the US economy. Like other commodity prices, oil prices are denominated in dollars, so the sharp decline in the US currency has made commodity assets more attractive to buyers.
It is worth noting that oil rose in price, ignoring the negative factors that could lead to a decline in prices, if not for the fall in the dollar. In other words, even a small correction in the US currency index will be enough for traders to turn their attention back to factors that are fundamentally important for the hydrocarbon market. A special place among them is occupied by the concern of traders about the plans of OPEC and Russia to increase oil production by 2 million barrels since August. This step is being taken by OPEC + as part of the gradual lifting of additional restrictions on production imposed by the pandemic.
In addition, investors fear a further deterioration in relations between the United States and China and an increase in the number of new cases of coronavirus, which could significantly cloud the prospects for a global economic recovery and demand for hydrocarbons. On the side of sellers are also statistics from the USA. The number of US oil rigs rose for the first time since March 13 last week, according to Baker Hughes. Their total number has increased by 1 unit. The relaunching of suspended facilities indicates that shale oil production is becoming more profitable at current oil prices. In the long term, this may lead to an increase in production in the United States, and, accordingly, the risk of oversupply against the background of still suppressed demand.
Brent SellLimit 43.50 TP 41.50 SL 44.10
Analytical reviews and comments to them reflect the subjective opinion of the authors and are not a recommendation for trading. Author Artem Deev is a trader analyst at AMarkets . The social network of traders is not responsible for possible losses in case of using the review materials
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