Crude oil price is going for over USD 70 per barrel

Crude oil quotation is still going up and stays around USD 70 per barrel level, while copper price is decreasing. The analysis made by Marek Paciorkowski, director of Financial Markets, Aforti Exchange, shows that we can expect the oil to slightly go up in the next period also.

The oil price is slightly going up, due to a cut in output by Saudi Arabia, which, despite the declarations of increasing the extraction, in July 2018 reduced the level of production to 10.3 million barrels per day (b/d), which is a decrease by 189 thousand b/d compared to June 2018. The entry into force of the first round of US sanctions on Iraq had also significant influence on the oil price.

Finally, OIL.WTI (Oil West Texas Intermediate, grade of crude oil used as benchmark in oil pricing) quotation reached over USD 69 per barrel, while the Brent valuation increased to over USD 74 per barrel. Other major changes in the oil market should be expected in the last quarter of 2018. In November 2018, another series of restrictions by the US are planned, targeting the Iranian oil and gas sector as well as the Iranian central bank.

Overall, the oil price is still trying to overpass the USD 70.05 price level. However, already for the second time, the price level of 70 USD has caused the withdrawal of the growth trend and drop in the price. We expect further attempts to growth the price and reach the medium-term barrier of USD 71.35 in the coming period.

On the other hand, the tense situation on the copper market stabilised slightly after the prospect of the one-month long strike in the world’s largest Chilean mine, Escondida, was postponed. Reaching the level of USD 275.50 (38.2 percent decrease) has stopped the further drops in the prices.

Over last week, copper lost in its value slightly but has nevertheless managed to defend its position of key support, which can result in the price increases in the following weeks. We expect that the level of USD 300 can be reached in the coming period however under condition that the level of USD 275.50 – 277.20 will be maintained this week.