Listen to the latest market mood for the USOIL.
US crude has been very strong this year rising about 25%. The reasons for this have been as follows:
- Saudi has been cutting production,
- There is optimism around a synchronised global recovery on vaccine rollouts,
- The US has seen some unseasonal cold weather boosting demand.
The second half of the year should mean a further tightening of supply for oil as demand picks up on a vaccine inspired global recovery.
Expect US crude buyers from dips lower to the daily trend line.
Trade Risks: The next OPEC meeting in early March is a risk as a big increase in production numbers will weaken oil price. Saudi will want to keep production cuts whereas Russia would like to see a reduction in cuts. The dynamic between Russia and Saudi will be key to near term prices next month.