The demonstrations seen in Washington had little impact on the oil price, generating a quick fall to $49.50 for the WTI benchmark, which was easily absorbed by the markets. The price has since jumped strongly back above $50 and in the first few hours this morning continued the recovery, reaching $51 while Brent is approaching the $55 threshold. This sharp spike for oil is supported by the strong risk on scenario which has dominated markets in the last few days. Investors are betting on further price gains thanks to both a recovery of global oil demand in Q1 and Q2 2021 and to the production cuts decided by Saudi Arabia after the meeting of OPEC+.
Moreover, news of the victory of Joe Biden in Georgia – which will give him the control of the Senate – strengthens expectations for further fiscal stimulus.
Chief analyst at ActivTrades and technical analyst for Italian newspaper 'La Stampa'. Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a weekly commentator for CNBC Italy and a columnist for La Stampa. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a 250-pages book on gold and the gold market, followed in 2018 by a new updated edition.
© 2019 High Leverage FX - All Rights Reserved.
© 2019 High Leverage FX - All Rights Reserved.