The future price of oil depends on upcoming negotiations, the U.S. and China
At the end of trading on Friday, Brent crude was able to go to a small plus, but the week ended with a decrease of about 1%. Quotes found support around the level 61 and was able to finish at a mark of 62. Despite intraday gains, the situation in the raw materials segment remains fragile, and in the beginning of the week prices again traded with a downward bias.
Downside risks for black gold remain relevant due to the fact that the first plan went out again the subject of a trade war between the US and China. The risk that the parties will not have time to conclude a trade agreement until March 1, is growing, and it can alarm investors already concerned about prospects for global demand amid signs of slowing global economy. So this week the players will continue to monitor developments in trade and the economy.
Market members will pay attention to the monthly report of OPEC, stated on Tuesday, and the report of the IEA’s oil market, which will be released on Wednesday. Statistics on energy reserves in the United States is also able to make local adjustments to the price dynamics, especially if they reflect the growth of reserves and production. By the way, according to Baker Hughes, the number of active drilling rigs in the U.S. last week rose 7 pieces – up to 854 units.
As for the geopolitical factor, which is now presented in the form of sanctions against Venezuela, while investors quite calmly react to it, but over time the geopolitics can also be reflected in the behaviour of futures, especially as you approach the expiration of exemptions for buyers of Iranian oil.
In the short term, Brent will continue to be guided by the sentiment in the stock markets and signals from the macroeconomic front. This week special attention will be focused on negotiations, the U.S. and China. The risk of loss level of 60 is still present.
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