The recent price upsurge is significantly attributed to the plunge in value noticed in the U.S dollar index coupled with another abiotic factor heading towards the Gulf of Mexico. However, rising COVID-19 caseloads capped Brent crude bulls resolve in breaching above the $41.50/barrel price level.
At the time of writing the London traded oil contract, Brent crude traded above $41.02/barrel and not forgetting West Texas Intermediate futures also trading above its critical support level of $38.50/barrel.
Oil traders are now placing more bullish bets on the bias that the hurricane storm, better known as Hurricane Zeta is on its way into the Gulf of Mexico. Hurricane Zeta is anticipated by meteorologists in making an impact on the U.S Gulf coast where oil rigs and refineries are located, thereby making oil companies shut down their offshore production momentarily.
Such prevailing fundamental would help to stabilize West Texas Intermediate futures above its critical support level on the bias that the world’s largest producer of black fossil oil, production capacity will be down at least by 17% in the near term.
Also, you shouldn’t forget to take note of oil traders, hedge fund managers increased bullish bets on the black oil fossil derivative market in the week to October 20 recorded the highest long bets since April, according to the latest commitment of traders report.
Oil bulls run presently prevailing at the fragile crude oil market coincides with strengthening market speculation earlier this month on sentiments that the oil cartel would likely postpone the easing of the ongoing oil production cuts until global oil demand strengthens, would surely give oil bulls the needed gas to stay afloat in the near term.
That said oil traders are focused now on the latest crude oil supply data, coming from the American Petroleum Institute, scheduled later today.
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This article was originally posted on FX Empire