Where’s The Range For Crude Oil Prices Right Now?

By Pete Southern in Gold and Oil News | April 12, 2016 13:32 | Tags: ,

Since the all-out fear of late 2015 and early 2016 subsided, Crude Oil prices have gained more than 50% since the mid February low. The question on everyone’’s lips now, is how far can Oil prices go?

As the fear began to dissipate Crude rallied, and rallied strong, to a high above $42 in March. From there it began to slide down into the mid $30 area, but during the last week it has been on fire again, moving up strongly to just a pinch under its March 2016 high.

Weakness in the US Dollar and a general uplift of sentiment towards commodities (as a whole) have been touted as one of the catalysts in the current upswing, however there’s also anticipation of the long awaited freeze of production helping things along.

The Wall St Journal quoted:

Investors are bracing for key oil talks between major producers, including Saudi Arabia and Russia. The producers, meeting in Doha, Qatar, on April 17, will discuss a deal to freeze their output at January or February levels in a bid to boost prices.

This is the same deal many were buying into during the rally from February. Yet now, it’s just around the corner. The only sticking point is that Iran have flat out dismissed any chance of a cut, opting to keep on pumping Oil, now that they are able to export after years in the wilderness.

It remains to be seen whether a deal to cut production by the major players, without Iran, will be enough to put a cushion under the $40 per barrel price. It seems that so far it’s enough, with prices buying into the upcoming meeting.

As far as where next after that, this quote from FT.com by Igor Sechin, a close ally of Russian president Vladimir Putin and the head of Rosneft tells its own story.

The oil price is growing. I think everyone is expecting the successful outcome of our work. We will need higher price levels than $45 or even $50 a barrel.

With the quote above coming from a high standing source within the industry, it really lays out a map for where they see Crude Oil prices in the near term. Most likely between $40 and $60 per barrel.

Pete Southern About Pete Southern
Pete Southern is an active trader, chartist and writer for market blogs. He is currently technical analysis contributor and admin at this here blog.

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