Brent crude rising due to tensions in the middle East
Oil prices have moved to growth on Friday, reducing weekly losses, which was the highest since may. Brent, who a day earlier had noted at the lows around 61.30 dollars a barrel, made up the five days trading slightly below the level of $ 63, which quotes tested at the opening session on Monday.
Geopolitical tensions in the middle East remains the focus of markets. Buyers picked up somewhat after reports that on Friday evening, Iran’s armed forces was detained in the Strait of Hormuz British tanker. However, the geopolitical factor, which is accompanied by expectations of supply disruptions and, consequently, reduction of global supply, does not give the market support due to the prevailing fears of a significant weakening in global demand.
Despite the fact that in recent time the world’s key Central Banks have demonstrated a willingness to ease monetary policy to support the economy, market participants continue to predict the demise of the global energy demand, citing deteriorating economic indicators in major countries.
However, geopolitics may yet provide more tangible support to the market, if the situation will continue to deteriorate, and Central Banks will continue to reassure investors with promises of incentives. In the short term Brent, which is trying to settle above the mark of $ 63, is likely to continue to operate in the conventional range, and downside risks will persist, as long as prices are below the 200-day moving average in the area of 65,80 dollars.
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