Oil price continue to storm the mark of $ 74 per barrel
Start of a new week was marked by the resumption of purchases in the oil market. Brent stopped short of the mark 74,50 and retreated after failing to close above level 74, though, and gained weight. On Tuesday morning deals quotes maintained an upward bias, leaving no attempts to turn the 74 level from resistance to support.
Buyers will become more active, but operate slowly and carefully. This only confirms a contradictory set of factors that influence commodity platforms. On the one hand, interest in purchases of fuels unexpected news about production cuts in Saudi Arabia, and the reduction of the number of active drilling rigs in the United States.
Not less significant factor of support is the launch of the first batch of sanctions against Iran. This package is not related to the oil market, however, serves as a signal for buyers of Iranian oil, which we have to find alternatives until November, when they will take effect Washington’s sanctions against the oil sector Tehran.
On the other hand, market participants remember about the readiness of Saudi Arabia and Russia to fill a possible shortage of supply due to the Iranian factor or any other supply disruptions. By the way, last month, the OPEC production increased by 0.2%. Also there are American kancevica that can resume the activity after a pause. In addition, investments in the raw materials segment started to grow again after the collapse almost 40% in 2014-2016 according to the IEA, last year investments in exploration and production increased by 4%.
In the short term, Brent will probably continue to test the coveted level 74. The longer the asset remains below this level, the higher the threat of a new correction. The important level in case of a successful breakthrough is in the area of 75,50.
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