Oil targets $100 per barrel

September has turned out to be the best month of this year for oil prices so far. Last Friday, West Texas WTI, and on Monday, North Sea Brent, broke through the strong resistance levels, then reaching highs not seen since November: $88.08 and $91.15, respectively.

It was difficult for the correction in the zone, which prices had unsuccessfully stormed more than once, became support and was nearby (slightly above $89 for Brent). And prices until the end of the week fluctuated between new records and former resistance, forming a typical “flag”.
In technical analysis, this is a continuation figure in a strong trend – and oil futures did not abandon the corresponding attempts all week.

They have repeatedly approached $91 per barrel in November Brent futures, and sometimes crossed this line. The next attempt took place on Friday evening, so the high of the day was $91.01.

As a result, both WTI and Brent closed the second week in a row with growth, and did not roll back much from the highs of both the day and the year. This suggests that many bulls decided to move positions through Saturday and Sunday.

Similar confidence was observed last Friday, despite the fact that then the weekend was long for many (on Monday the US had a holiday in honor of Labor Day). Then records followed, and this time there are some chances of moving up from the “flag”. Growth on Monday after a week closed near the maximum is not uncommon.

Another thing is that, despite the records, the growth there was very small in comparison, for example, with the previous one – only 2.2%. This may cast doubt on the strength of the bulls, especially since both marker grades of oil are in the technical overbought zone for the sixth day in a row.

So in the short term, not everything is clear, but in the long term, the chances of growth are great. And not for technical reasons, but for completely fundamental reasons.

The formal reason for setting records was statements by Russia and Saudi Arabia on Tuesday that the reduction in oil supplies would be extended until the end of the year. In fact, multi-month resistance was broken in advance – for WTI on Friday, and for Brent on Monday. And the reason is not inside information, but in the objective situation on the physical oil market.

Here a deficit is gradually growing, the very presence of which not all players have yet realized. But, for example, Goldman Sachs estimates it at 2.3 million barrels per day (b/d).
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Oil targets $100 per barrel

By Gleb Baranov September has turned out to be the best month of this year for oil prices so far. Last Friday, West Texas WTI, and on Monday, North Sea…