Will oil prices go up any further?
Oil prices have been rising in the past few sessions, supported by a recovery in demand from the pandemic and by supply cuts led by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+. Brent crude surged for a fifth day on Wednesday, climbing towards $75 a barrel to its highest since April 2019. Analysts expect prices to continue to rise after a nearly 50% rally so far this year. Brent crude oil prices may test higher levels of $78 to 80 and the support may be at $68 to 70 level, Emkay Wealth Management said on Wednesday. But the rise may be to a certain extent limited by the strength in US dollar against other currency majors. Emkay said one major factor that dominated oil markets is the possibility of a nuclear deal between the United States and Iran, and also better relations between the two countries based on their reported talks. Overall economic conditions warrant higher consumption and therefore, higher prices. Again, much would depend on the stance taken by OPEC+ which may be meeting soon. Russia is now in sync with OPEC in achieving the production cuts which the OPEC had envisioned earlier, the study by Emkay Wealth Management said. Oil prices have been rallying this month as leading economies continue to reopen, aided by widespread covid vaccine programs. Kotak Securities said that on supply side, crude has largely benefitted from expectations that Irans nuclear deal may not be revived soon. However, global leaders continue to make efforts to finalize a deal. The top European diplomat coordinating international talks Enrique Mora said on June 15 that progress had been made but that the talks needed more time (Iran International report). ''Crude remains unfettered despite forecast of higher output from US shale resources next month and rise in US crude oil rig count to April 2020 highs. Crude oil has continued to set new highs indicating strong upward momentum however some caution is recommended as mixed factors could challenge upside,'' Kotak Securities added. Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter.