By Natalia Milchakova, Alpari
Last week the downtrend on the crude oil market was broken, and crude prices went up. The prices of WTI rose 4% and reached $42.7/bbl. On August, 8, the price of WTI reached its weekly high of $42.81/bbl. However, the next day it failed to remain at that level and plunged 0.25% to $42.7/bbl. The important resistance level is located at $45/bbl. Nevertheless, WTI price did not yet reach this level.
The price of Brent crude also rose 4% last week and reached $44.97/bbl. We notice that the spread between the prices of Brent and WTI broadened to $2.27, while earlier it did not exceed $1-1.5. This reflects the high level of volatility on the crude oil market.
We can say that the downtrend of the two previous weeks is likely to be broken. However, Brent failed to remain at its weekly high of $45/bbl. If Brent manages to remain above this level, it would reach the next strong resistance level of $47-48/bbl.
Commercial oil stocks in the US rose by 1.67m bbl, while the market expected a decrease of 2.26m bbl. Nevertheless, Baker Hughes reported that the number of active drilling rigs rose only by 7 units last week. The data is ambiguous. However, some media sources reported last week that OPEC is likely to consider the opportunity of freezing of crude production at the levels of early 2016. But the representatives of OPEC did not confirm or deny this news.
We expect the prices of Brent and WTI next week to be in a range of $41-45 bbl.
Free Reports:
Article submitted by Alpari.com