I have been looking at many charts that depict the current oil prices and even created one for my own website/blog using the weekly oil price data since 1987, from the EIA, the US Energy Information Administration.
Despite all that, sensing the trend, upward or downward, on weekly basis is as ridiculous as betting on the foot that a centipede will put ward in order to shorten its crooked path.
I am sure this must be the nightmare of every chartist who lurches on the uncertainty of crude on markets.
The crude oil price continued to rise on Monday, following the bullish pattern of the last week, despite the decline in motor traffic on our roads, lack of air travels in the sky and of course, the conflicting signals about the end of the pandemic, shadowing the presence of over 4000 variants of the virus among the human beings.
Of course, on one hand, Saudis have cut the output for next two months by 1 million bpd, in addition to the quota agreed upon in January by the members of the OPEC+.
On the other hand, the US rig count has gone up, according to the latest data from Baker Hughes; moreover, President Trump is not in power anymore, having been the first world leader who used to roar at the Saudis through the impromptu megaphone of his palms in public, when the oil price was very high.
What was missing, however, was the phenomenon of balancing when two opposing factors were at work; not only did the Brent crude oil price rise, but also went up by a significant number smashing through the threshold - $60 per barrel.
There were a few factors that always play the key role in the rise of crude oil prices - for obvious reasons: the OPEC+ meeting last week ended with the members agreeing to maintain the status quo; the US oil inventories recorded 3rd successive weekly drop; Saudis increased the crude oil price for America and Europe; they did the same for Asia as well, last month despite the criticism from the affected nations.
In addition, there is the unsubstantiated, latent undertone about the supply being static that plays the role of market equivalent of gravity in order to hold the favourable factors in cohesion.
Things as they stand right now, investors, traders and even analysts are in unchartered waters of the crude oil market; it’s the kingdom of unknowns, leaving the crown to be snatched by the super-forecaster who paddles his own analytic canoe intuitively.