Forex Analysis & Reviews: 16.09.2019 - Oil market in shock: prices...

Live Chat

InstaForex Loprais Team - Official participant of the Dakar rally

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Account Opening

See also

Trading Conditions

Forex Analytics

Charts

This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.

Start as Beginner

How to start trading

Useful information

Training and recordings

InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.

Become Investor

PAMM System

ForexCopy System

Passive investments

OYS account

Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.

Become Partner

Main Page

Partner Area

Advantages for Affiliates

Registration

This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.

All Promo Campaigns

Bonuses

Contests

Events

Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.

Full details

Forums

We are in social networks

Forex humour

Forex Portal

InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.

Learn More

History

Why Choose Us

InstaSport

Regulation

Company News

Awards

InstaForex Stars

InstaForex Offline

Headquarters

Key documents

Social Responsibility

InstaForex - Official partner of Dragon Racing

16.09.2019 10:45 AM

Oil market in shock: prices soared above 13%, and this is not the limit

The price of black gold has shown another record. On Monday, September 16, raw materials rose by more than 10%. The reason for this was the attack of drones at a refinery in Saudi Arabia.

The forced reduction in oil production by Saudi Arabia contributed to a sharp increase in the cost of Brent futures at the opening of trading on Monday. The price of black gold rose by more than 10%, and reached 15%. As a result, the cost of oil exceeded the mark of $ 70 per barrel. Currently, trading in oil futures is held near the level of $ 67 per barrel. The maximum growth of quotations reached 19%, experts say.

According to analysts, what happened on the black gold market has no precedent in history. The attack on the refineries of the kingdom with the help of drones-drones was carried out by Yemeni Hussite rebels on Saturday, September 14. As a result, Saudi Arabia had to cut its crude production by more than half - by 5.7 million barrels per day compared with the usual volume of 9.8 million barrels per day.

There was no similar failure in the supply of raw materials either during the Gulf War in 1990, or during the Islamic Revolution in Iran in 1979. Experts emphasize that the current rise in prices has become a record for the entire history of trading in Brent futures, which has been conducted since 1988.

It can be noted that at the opening of trading on Monday, November futures for the North Sea Brent mixture were trading at $ 67.8 per barrel, which is much higher than the $ 60.15 mark recorded at the close on Friday. Almost simultaneously, they grew by 19.1%, to $ 71.62 per barrel.

In the near future, the Saudi authorities intend to eliminate problems in the supply of raw materials. Since the kingdom is the world's largest oil exporter, even a temporary reduction in production in such volumes can cause powerful growth impulses in the market. This situation provoked panic among traders and investors. At present, the market has lost about 20% of oil production, or 29.6 million barrels per day. Global production of black gold fell by almost 6%, experts emphasize.

According to preliminary estimates, if problems are fixed within a week, oil prices will rise by $ 3– $ 5. In the case of longer troubleshooting (up to 2-6 weeks), oil quotes will add from $ 5 to $ 14, analysts at the largest Goldman Sach bank are sure. If force majeure lasts more than six weeks, oil prices will gain a foothold above $ 75 per barrel, according to Goldman Sach.

However, these figures are not the limit. According to calculations by Onyx Commodities, if the problem cannot be resolved in the near future, then the market should prepare for $ 100 per barrel.

The skyrocketing price of black gold may be temporary, other analysts reassure. A significant increase in the cost of raw materials at the opening of Monday is largely due to the traditional locking of short positions, experts say. Traders who opened a large short were losers. This forces many of them to fix their positions, accelerating oil prices even higher.

Thus, many experts believe that we should now expect an increase in the geopolitical premium in oil quotes. Its rise is possible due to the risk of the resumption of situations such as the current one, as well as against the background of a confrontation between the US and Iran. Since the beginning of this summer, the stability of oil supplies from the Persian Gulf has been threatened, but now, the level of tension can reach new heights, experts summarize.

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.