22.07.201911:18 Forex Analysis & Reviews: Grow or fall: oil may be in the red

According to analysts, the current summer was not easy for the black gold market. Experts are alarmed by the unpredictability of the future dynamics of oil prices. They believe that the oil "swing" can go down and in the end, the cost of black gold will be at a minimum.

Recall that in late spring of May this year, oil quotations sank by 13%. In the future, this fall periodically continued, interspersed with a slight increase. Over the past week, oil quotes have lost 8%. According to the calculations of the strategist of the largest company RBC Capital Markets, Helima Croft, the US sanctions against Iran can "shake" and bring down the commodity markets. The specialist believes that oil prices may drop in the near future to the minimum values of 2019.

According to H. Croft, the oil market does not respond to the risks associated with the current geopolitical crisis. The expert considers the growing production in the USA, the trade conflict between America and China, as well as the serious weakening of the global demand for black gold to be risk factors. This greatly complicates the situation for investors who prefer to act cautiously. Many market players are concerned about the impossibility of predicting the potential scale of geopolitical conflicts. Experts note that putting political risks in oil prices is an extremely difficult task and the correct calculation in this matter is a separate art.

"Geopolitics plays the role of a safety cushion for oil prices today, but everyone outweighs unrest over demand and the slowdown of the global economy," says H. Croft. In the event of the elimination of this airbag oil quotes may collapse, experts believe. "In the case of a drop in quotations below $54.60, the oil will test the lows of this year. This is a key point. In the next two weeks, a peculiar struggle between the factors of supply and demand is expected. We should not lose sight of geopolitics, the outcome of which will determine the direction of price movement for black gold", emphasizes H. Croft.

According to the expert with respect to oil production, the White House administration continues to put pressure on Iran. The expert recalled that during this year, two million barrels of Iranian oil left the market. The current situation illustrates the fact that America is "pushing its line" against Iran without encouraging a rise in energy prices. Against this background, the cost of black gold continues to experience difficulties with growth, H. Croft sums up.