Oil prices plumbed new lows this week, dropping below $28 per barrel. But oil also closed out the week on a positive note, with huge gains on Thursday and Friday, rallying back above $30 per barrel. The price increase could be a sign that the markets think that oil has been far oversold, that trading this low has been “irrational,” as the head of Saudi Aramco put it this week.
Adding to the upsurge was growing speculation that central banks around the world will take additional action to provide some monetary stimulus amid worrying signs of faltering growth. EU central bank chief Mario Draghi provided the clearest indication yet that his institution may act as soon as March.
It’s a little premature to say a rally is on, but oil prices are going to have to rise at some point with so much production currently underwater. CMC Markets, a UK-based trader, says that $34 is the next resistance point for oil, from a technical perspective. If oil can break above $34 per barrel, then the rally could have some momentum.
At the World Economic Forum in Davos, Nigeria’s oil minister Emmanuel Kachikwu said that he expects oil to rise to $40 by the end of the year. Oil prices could get worse in the short-term, but “the second half of this year holds more promise,” he said.
Insure-Digest
Adding to the upsurge was growing speculation that central banks around the world will take additional action to provide some monetary stimulus amid worrying signs of faltering growth. EU central bank chief Mario Draghi provided the clearest indication yet that his institution may act as soon as March.
It’s a little premature to say a rally is on, but oil prices are going to have to rise at some point with so much production currently underwater. CMC Markets, a UK-based trader, says that $34 is the next resistance point for oil, from a technical perspective. If oil can break above $34 per barrel, then the rally could have some momentum.
At the World Economic Forum in Davos, Nigeria’s oil minister Emmanuel Kachikwu said that he expects oil to rise to $40 by the end of the year. Oil prices could get worse in the short-term, but “the second half of this year holds more promise,” he said.
Insure-Digest
