Due to the strength of the US dollar and the overshadowing of rising geopolitical risks by technical weaknesses, oil prices have fallen.
West Texas Intermediate (WTI) remained above $81 on January 25 (Bulgarian time 19:15), while the variety of oil “Black Swan” remained slightly below $84.5 after reaching its highest level since the end of the month on Monday. The rebound of the US dollar has reduced the attractiveness of commodity prices denominated in dollars, and Brent crude futures are approaching overbought territory.
However, against the backdrop of global turmoil, oil prices have maintained a monthly increase. The Houthi armed forces have also intensified their attacks on ships near Yemen, Russia has accused the United States and Ukraine of missile attacks on Crimea, and has threatened retaliation.
The WTI spot delivery price differential has recently weakened, reversing from $1.15 last week to 76 cents. The implied volatility of Brent crude has slightly increased due to geopolitical risks (including the upcoming Iranian elections), but is still close to a six-year low.
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Morgan Stanley analysts expect the average price of Brent crude in the third quarter to be $84 per barrel, with expectations of reaching $86 in October or November, as global demand is expected to exceed supply. Macquarie analysts have raised their forecast for the price of Brent crude in the third quarter from $83 per barrel to $90, expecting an increase in demand.
Traders are closely monitoring inflation and other economic indicators this week to understand the future direction of monetary policy.
