Aside from cryptocurrencies being the main subject of the markets recently, commodities are reaching new heights with crude oil on the rise with solid growth.
For the first time since 2014, Brent oil reached $71 per barrel, as well as WTI crude futures rising to $66.35 per barrel, the highest price mark since December 2016. Both crude benchmarks have increased by almost 60% since the middle of 2017. In addition, US production reached 10 million barrels per day for the first time since 1970.
Showing the lowest level since 2015, US crude inventories dropped 1.1 million barrels in the week of January 19, according to the Energy Information Administration (EIA).
In light of this, the likes of crude oils are further enticing financial traders to want to move their investments from currency to commodities future, as a result of the current weakening USD.
The quick movement of the markets was underestimated by Goldman Sachs, who in turn increased its forecast for Brent oil, showing that prices could reach $82.50 per barrel by the summer of this year.
The high volatility of trading oil, and it being one of the most actively traded commodities in the world, makes it a sought after and an appealing market for investors to get in to. Influencing the market are geopolitical factors, potential world crisis’, supply and demand, and weather changes, just to name a few factors.
Some crucial pointers for investors and traders to be aware of that may spark off some heated conflicts in 2018 are:
- European refiners are threatening to cut Russian oil purchases
- Iraqi forces are planning military operations to secure oil route to Iran
- Motive Enterprises LLC shut down the large crude distillation unit at its 603,000-barrel-per-day Port Arthur, Texas refinery Traders are looking to take advantage of the current status of oil in the markets, and increase their portfolios.
Disclaimer: Investing in any financial product carries significant risk and may not be suitable for all investors. Trading leveraged products on margin such as derivatives or fx carries a high level of risk and may not be suitable for you.
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