According to Aforti Exchange experts, panic on the oil market, which has been seemingly triggered by a tense situation between the US and Iran following the Americans denouncing the nuclear contract, has in fact had its source in the situation that started already in Autumn 2017.

The rise in the price of “black gold” has been supported by the recent drops in the US reserves. According to the US Department of Energy (DoE), the oil reserves fell last week by 2.2 million barrels, or 0.5%, to 433,76 million barrels. As a result, thereof, the European oil was valued at USD 78, while the American reached the level of USD 72. According to Aforti Exchange experts, the rising oil price was to be predicted, as it was already indicated by the technical analysis performed as early as in September 2017.

At the same time, it can be assumed that the ongoing and already advanced wave of growth will lead to local adjustments, which in the next few months will result in a test of the main downward trend line, which is currently established at around USD 90.

Oil price levels on a monthly basis (Aforti Exchange)

Crude is aiming at a price level of USD 78.80

The global situation on the oil market, even if considered exceptional in recent days, should not be considered surprising. The upward trend, supported by the strong formation of oRGR, began in September 2017, when the price level of 46.15 – 48.80 USD was overpassed.

Currently, the market is approaching, in a consistent manner, the closest long-term resistance point, which is USD 78.80. This price is a result of a minimum from September 2011, when we were dealing with the first wave of declines, which eventually led the oil price to reach the low of USD 33.60, at the beginning of 2016.

The current upward trend is already very advanced and, despite heading up, local corrections should be expected. If the above-mentioned prediction were to realize 100%, in the next few months the test of the main downward trend line, which is currently at around USD 90, will take place.