The trade conflict between the US and China is gaining momentum, which negatively affects the cost of oil. Nevertheless, the rates are kept at a high level and continue within the upward trend. Moreover, the price of oil continues testing the level of $70 and can successfully overcome it in the near future.
This week oil prices received support amid statements by officials from Saudi Arabia. They stated that current price of oil is optimal and the market is stable. At the same time, they will not contribute to the growth of prices above $80, but will not prevent. Also, oil is becoming more expensive due to the implementation of sanctions against Iran, which will lead to a significant reduction in oil supplies by the third oil exporter from OPEC. At the same time, the US requires importers to completely refuse Iranian oil, according to their sanctions.
In the long term a number of negative factors remain in the market which negatively affect the cost of oil: the trade conflict between the US and China, the growth of shale oil production in the US, and plans to increase oil production in other countries to replace Iran on the market. In addition, the lack of interest of market participants in further price growth should also be noted. Therefore, we can see a tendency of losing intensity in the uptrend in the future. However, oil has not yet lost its growth stimulus at all and could rise by 10% in the short term. Thus, at the moment the most effective will be the deals to BUY, which is also confirmed by the Stochastic oscillator.
