On December 26, after reaching the lowest level in a few years of only 42.4 dollars per barrel, oil began to gradually recover in price. Just in a month the price rose by 21%, up to $54.2. An uptrend was formed, which was inevitable because no one would be satisfied with the price of $40 per barrel for a long time. One by one enough incentives appeared for price growth. Now there are more than enough of them.
The rise in prices began traditionally, with the plans of exporters such as Saudi Arabia to reduce oil extraction, as reported repeatedly, including this week. In addition, an impulse for growth was provided by the continuation of negotiations to resolve the trade conflict between the US and China. The main factor in the rapid growth of oil prices unexpectedly became the political situation in Venezuela, as the country was on the verge of revolution. Mass protests took place in the country, and the leader of the opposition, supported by the United States and other Western countries, declared himself the new President. A quiet change of power, with the deliberate resignation of the President, did not occur. Today the situation remains uncertain. It is not impossible for another protracted military conflict to begin, or for the power to change accoriding to the “Libyan scenario.” This opinion was expressed by the Minister of Foreign Affairs of Italy, who refused to recognize the leader of the Venezuelan opposition as the new interim President of Venezuela. A key role in this conflict will traditionally be occupied by Russia and the United States, who are fighting among themselves for spheres of influence. At the same time, both countries benefit from the development of the conflict in Venezuela, which leads to an increase in oil prices despite the decline in demand and the slowdown of the world economy. The work of the state oil company is almost paralyzed, under the influence of new US sanctions; as a result, the supply of Venezuelan oil is on the verge of failure.
Another factor in favor of rising oil prices was the temporary congestion in the Bosphorus Strait, where there are dozens of oil tankers stuck due to bad weather and changes in a number of rules for the passing the Strait, which is certainly a temporary factor that will not support high oil prices in the long term.
In this situation, the deals to BUY may be the most effective in the medium term. However, the price increase will still be limited and oil is unlikely to overcome the mark of $60 per barrel. The deals to SELL will be effective in the short term. The Stochastic and MACD oscillators are multidirectional, but this is the case when fundamental factors will play a key role in further price changes.
