June 22, 2021, | AtoZ Markets- Brent crude oil futures hit $75.29 per barrel today, marking a new 2021 annual high. Likewise, the price of black gold has hit a 2-year and 8-month high.
With this latest rise, the price of Brent oil has managed to gain 41.99% this year, growing by approximately $24.40 per barrel.
The consensus among market analysts, including OPEC +, is that demand for oil will exceed supply in the second half of 2021. OPEC data shows that by the end of 2021 oil demand will be 99.8 million barrels per day (bpd) compared to supply of 97.5 million bpd.
Meanwhile, Goldman Sachs expects Brent oil prices to rise at least $80 per barrel in the fourth quarter of 2021. Their argument is that the market has underestimated a pickup in demand.
The Upward Trend Continues
The bulls have been winning the battle and the uptrend is still in force. Thanks to the increase in vaccination and the global economic recovery, the price of oil has a good chance of continuing to grow.
If you are a long-term investor this is good news. However, don’t forget to always check the demand data and all relevant factors that may affect it.
If we use the Fibonacci expansion tool, we can see that the $78.40 area is the next resistance to consider. Beyond that, a rise above $80 per barrel would bring good news for oil-dependent emerging markets.
Brent Oil Price Evolution
The evolution of Brent crude oil prices in recent years has been as follows:
- 2019 = +29.01%.
- 2020 = -21.75%.
- 2021 = + 43.29%.
- 1-year oil evolution = + 75.48%.
- 3-year evolution = + 0.51%.
- 5-year evolution = + 46.94%.
How to Trade Oil If You Are a Short-Term Investor
Oil is a highly valued raw material, however, it is also one of the most volatile as it is very susceptible to geopolitical events. Circumstances that the economy cannot explain or control, such as natural disasters, wars, or global instability, can all affect the price of oil.
If we check the daily chart of Brent we can see that the 60 EMA is already currently very close to $70 per barrel. This gives us an idea that this price is a good support for the market.
In the short term, the most important Fibonacci retracement levels are at $72.71 and $71.26 respectively.
Mr. Investor, always remember to analyze the charts of two timeframes higher than the one you are trading. This will help you to have a more complete and overall picture of the market.
For example, if you trade in 30 minutes, the 1 hour and 4 hour charts are very important.