Although crude oil does not pertain to the foreign exchange market, it is often traded by currency traders via CFDs provided by numerous retail Forex brokers. The last time WTI oil traded below $40 per barrel was on August 3, 2016, while the Brent crude reached that low back on April 8, 2016.
Both commodity benchmarks are trading in a clear downtrend in 2017 as indicated by the regression channels on the daily charts.
However, there is much doubt that the current trend can continue to sub-$40 levels considering two fundamental factors:
- US shale oil production cost is somewhere within $25-$55 range depending on the region and the estimate methodology.
- OPEC will become more aggressive in its production cuts if the price approaches $40 mark.
To get a better grasp on the technical picture, you can look at the weekly chart, which shows crude prices in a
My own prediction, which I had made in my 2017 forecast post, anticipated a rather strong growth of the crude prices to $60-$80 range this year. The optimism was based on the prospects for improved global economy growth rates and the agreement by the OPEC and several
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