WTI Outlook | Crude Oil prices heading to $70 per barrel? | 27/03/18

[IronFX The Global Leader in Online Trading]( 27th March 2018 [start trading]( [open demo account]( All trading involves risk. It is possible to lose all your capital. Crude Oil prices heading to $70 per barrel? Fundamental Analysis: Oil prices moved higher on Tuesday, reinforced by fears that tensions in the Middle East could result in supply disruptions. Last week President Trump employed John Bolton as national security adviser. Bolton is considered a well-known hawk and his employment, could harden the US approach against Iran and could cause some interruption of outflows from the OPEC member.The oil prices climbed by more than 7 percent so far during March and added 5.3 percent in the first quarter of the 2018, adding to its positive sentiment for a third successive quarterly gain, something the market has not seen in more than 7 years. Chinas own Oil Futures market is the next biggest event to take place in the industry at the moment. China, acknowledged as the world’s biggest Oil importer, has set up its first own yuan-denominated futures market available for trading to the public. Chinese commodities will be bringing competition to the Oil market as a whole and will challenge London and New York in price setting. There is an argument among many traders and analysts, that the Chinese have very good reasons to set this commodity’s market up and running, as they were seen grabbing the opportunity with both hands at the right time and this is not by chance. Trading these Futures would provide control over pricing from the main international benchmarks, which are dollar denominated. Converting Oil contracts to yuan could support the use of China’s currency in the global trade. This definitely could be one of the country’s strategic long-term goals, as China is a key market and has the power to bring prices to its advantage in the long term. Furthermore, China is said to be interested in Saudi Aramco’s planned initial public offering. It could also be Chinas attempt to influence Saudi outlook toward accepting yuan, which touches roughly 2 percent of global payments. Goldman Sachs officials reported on Monday, that the world’s largest oil companies are enjoying their biggest cash flow growth in decades as well as earnings. Crude’s downfall since 2014 changed the way the biggest companies operate, forcing them to drive down production costs and work smarter with more efficiency. Royal Dutch Shell Plc, Total SA and BP Plc are among the majors proclaimed. Goldman also indicated in its report that the latest performance of the above will increase their attraction for investors. At the same time, on another front, U.S. shale producers are expected to jump in very actively, as current or higher prices opened the possibility for a new comeback. Keep in mind that Crude oil is currently trading above $65 USD per barrel. In conclusion, Oil has been acting very positively, gaining in value in the last 2 weeks, supported by financial and fundamental data. Financial data may slow down the strengthening process but the fundamental news regarding the Middle East do not seem to be resolved any time soon and may follow us for the rest of the year.  The problem with the Middle East tensions could go either way in regards to resolving or augmenting it, but in our opinion Crude Oil is heading to $70 per barrel. Technical Analysis: Crude Oil is currently trading around $66.50 per barrel. At the moment the RSI indicator is approaching the 70 level indicating the commodities may be in an overbought session and traders could be looking release orders with profit taking. If the commodity is to fall in a bearish tone, it could test the $64.55 (S1) Support level and even breach it moving towards the $63.50 (S2) Support hurdle. This case could be supported by the financial data released on Wednesday with an increase of 0.42M barrels expected to be released. If black gold is mixed up with financial and fundamental data, the commodity could react accordingly and move in a sideways manner with some bullish tones, between the $64.55 (S1) Support level and the $67.50 (R1) Resistance barrier. However, if the bulls overtake Crude Oil, we may see it heading towards the $67.50 (R1) Resistance level and even breaching it moving higher to the $69.00 (R2) Resistance zone. This scenario is possible if the Crude Oil inventories or API Crude Oil Stocks are realized with any negative outcome. Even the slightest drop in supply could boost oil prices as the sentiment is already positive since last week. Crude Oil 4 Hour chart below [Image title] Prepared by: Peter Iosif and Angelos Zittis [Facebook]( [Linkedin]( [Instagram]( [Twitter]( [Google+]( [YouTube]( - Tel: +44 (0) 20 3282 7777 - Email: support@ironfx.com High Risk Trading Warning: Our services include products that are traded on margin and carry a risk of losing all your initial deposit. Before deciding on trading on margin products you should consider your investment objectives, risk tolerance and your level of experience on these products. Trading with high leverage level can either be against you or for you. Margin products may not be suitable for everyone and you should ensure that you understand the risks involved. You should be aware of all the risks associated in regards to products that are traded on margin and seek independent financial advice, if necessary. Please read IronFX’s Risk Disclosure statement. This website is owned and operated by IronFX. 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