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The Academy of Financial Trading
Crude Oil – The Foreseeable Future
WTI Crude Oil
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Risk Warning
Overall and the global view of Crude oil
Over the last year Crude Oil has essentially followed a net overall bearish run
Oil analysis
Much has been said as to why this has occurred but the general consensus seems to be due to worldwide over-supply
The driving forces behind this fall have mostly been attributed to geo-political ones – Oil Producing countries essentially engineering their supply to set oil prices at a level that suits their political stance and then to generate revenue – competition!
It this still the case and a valid basis on which we can argue is the main underlying input affecting the Price of Oil?
WTI Crude Oil
OPEC and Supply & Demand….
OPEC – essentially is an organisation designed to regulate and bring order to the countries in our world that produce Oil
Of Late OPEC has been losing its ability to actually set oil prices – this is of course brought about by setting supply levels to match global demand
One of the mechanisms it has in place to achieve this is its ‘output quota system’ – essentially a ceiling or cap on production levels that each of it’s members is supposed to obey
The idea behind this is so that each of it’s member countries can profit form Oil production at a mutually acceptable price…. Ideally preventing any one country from having a monopoly on Oil prices
WTI Crude Oil
Oil analysis
The conclusion and facts to support the same
We must draw some logical conclusions from our points thus far
It has been suggested by analysts that OPEC members may continue to over-supply to account for lost revenue from the low prices of late
This could see a further over-supply and a further drop in price
Let’s take a look at some facts and figures to help us determine a possible price range for Oil over the next period of months
WTI Crude Oil
Oil analysis
The Capped levels have not been obeyed and essentially the overall market for Oil is now laced with competition for market share
The Charts… In the short-term, oil markets could experience strong volatility and price swings in both directions — potentially in the range of $45 to $80 per barrel.
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