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0 News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://newsghana.com.gh/crude-market-revives-with-buyers-in-control-as-brent-futures-surge/
After a period of relative calm from October to December, the crude oil market has experienced a significant resurgence, with buyers now firmly in control.
Brent futures have surged past the crucial 200-day moving average and Friday’s highs, prompting speculation that prices could reach $85 per barrel. This sharp uptick has been driven by multiple factors, most notably supply constraints, which are becoming the primary catalyst in the near term.
The recent moves in the market have been further complicated by geopolitical events. U.S. President Joe Biden’s fresh sanctions targeting Russia’s two largest oil producers and Russian tankers are disrupting supply channels, making it harder for Russia to navigate the logistical challenges of exporting oil. Biden’s sanctions, which are framed as a means to provide Ukraine with greater leverage in potential peace talks, have nonetheless set the stage for higher oil prices. This rise in prices, however, presents a challenge for former President Donald Trump’s proposed energy policies, which focus on dramatically lowering energy prices.
In addition to these geopolitical factors, the onset of colder weather has provided additional momentum for the buyers, especially with a recent draw in crude oil inventories. Sellers, who might have been looking to capitalize on previous highs, have largely stepped aside, creating room for buyers to push prices even higher with greater ease.
Another critical indicator is the shift in the futures curve for both Brent and West Texas Intermediate (WTI) crude, which has deepened into backwardation. This market condition further incentivizes those holding long positions to maintain their positions, knowing they will benefit from the higher carry costs over time.
As for the immediate future, supply remains the central driver. Traders and analysts are closely monitoring headlines related to sanctions, particularly the moves Russia will take to mitigate the impact on its oil exports. Given the current dynamics and the ongoing tightening of supply, higher levels in crude prices seem increasingly likely. For now, the surge is one that many are hesitant to bet against, leaving room for further price increases in the near term.
News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://newsghana.com.gh/crude-market-revives-with-buyers-in-control-as-brent-futures-surge/
