Summary:
- Brent Oil rises back to $70
- Price is back near its highest level since 2014
- Reports that Saudi want $80 oil ahead of Aramco IPO
The Oil price has been rising at the start of this week with tensions in the Middle East rising once more following the latest chemical attack in Syria providing a boost. Brent Oil has today gained in excess of 2% to trade with a 70 handle once more and the market is back near its highest level since 2014 and trading around the $70 mark once more.
A D1 chart shows that price may have broken out of a falling channel today and bulls will be looking to retest the January high of 70.77 to see whether a larger breakout may occur. The sell-off seen on Friday had threatened to negate this latest leg higher with a close below 61.45 a negative development, but the Syria news over the weekend turned this into a false break. .
The market is attempting to make another push higher after breaking out of a falling channel. YTD highs of 70.77 could be set for a retest. Source: xStation
Whilst the Syrian tensions are certainly having a short term impact on the oil price, the longer term direction is sensitive to Saudi Arabian policy, as the kingdom is the largest swing producer in OPEC. The IPO of Saudi Aramco which is expected to occur in 2019 is a big factor to consider here, with Saudi Arabia keen to float off their oil assets when market pricing is favourable.
Along these lines there is some suggestion that Saudi will look to boost the oil price going forward, with the latest reports suggesting they said as much to OPEC delegates and other oil market participants. Whilst they have stopped short of explicitly stating a target price publically, in private they are thought to be looking at $80 a barrel – a $10 rise from current levels.
Oil is back near $70 a barrel with reports doing the rounds that Saudi are looking for $80 ahead of the Saudi Aramco IPO. Source: xStation