The rates continue in the frames of an uptrend. Overall, the situation on the market matches with the forecasts of analysts who expected for this year oil prices in the range of 60-65 dollars per barrel CL/WTI. We can see an appropriate consolidation on the chart with signs of the flat trend formation.
The main negative factor for oil, which is limiting the price increase, is the steady growth of oil extraction in the US, which last week exceeded the historic record and amounted to 10.4 million barrels per day. OPEC's only response at the moment is to stick to its agreement on reducing oil extraction and the willingness to prolong it. However, oil managed to receive support because of the beginning of the trade war between the US and China, which affects the stock, currency, and commodity markets. Investors fear that a trade war can lead to interruptions in the supply of oil to the world market.
The growth in oil extraction in the USA is likely to continue and will negatively affect the cost of oil, but in case of an actual trade war, we can expect a further growth in oil prices. At the same time, it can be confidently assumed that prices will not grow as rapidly as in the beginning of the year, even if the uptrend continues. The stochastic oscillator signals the rates in the overbought zone and the probability of a price correction. In this situation, the short deals would be most effective.
