26.10.202110:25 Forex Analysis & Reviews: Oil prices have every reason to further increase

As investors' attention is focused on the published corporate statements of companies for the third quarter, it seems that crude oil prices have stabilized and show a complete lack of the possibility of a downward pullback.

The previous increase in crude oil prices was due to the broadest demand in Asia, primarily in China, before the expected cold winter in the northern hemisphere of our planet. Second, it appears that the world's rising inflation is forcing countries to act ahead of the curve and actively replenish reserves of "black gold". In addition, the reason for the rapid growth in demand for this energy commodity was the failed "green" policy of Europe, as well as the strengthening of Russophobic sentiments in this region, actively fueled by the United States. Many countries have not extended long-term contracts with the said country, which caused supply disruptions and widespread problems.

What can be expected in the oil market in the near future?

We believe that high demand will continue, which means that prices can still increase. But will this growth be vertical and short-term or sustainably smooth?

We believe that it is not important for speculators in commodity assets and the fact that such a probability is high is confirmed by the opinion of some investment banks and general market sentiment. So far, quotes are consolidating in anticipation of new data on oil and petroleum products reserves in America, which will be released from the American Petroleum Institute today, and from the US Department of Energy tomorrow. It can be assumed that if data from both of these organizations show a decrease in oil reserves, and such a probability exists due to high demand for refined oil products, then this may bring quotes out of equilibrium and push them up to new local highs.

Against this background, commodity currencies such as the Canadian dollar and the Norwegian krone will receive a new impulse to strengthen against the US dollar.

Forecast of the day:

The WTI crude oil's price is consolidating below 83.85 in anticipation of the publication of data on oil and oil products from the American Petroleum Institute today, and from the US Department of Energy tomorrow. The decline in inventories will serve as a new impulse for the continuation of price growth, which may rise to the target level of $ 87.35 per barrel.