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π Insider time: is there a chance for oil to reverse?
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Geopolitical risks generally do not pose a long-term threat to commodity markets. Oil traders believe that politicians will not allow a new escalation of the conflict in the Middle East and are preparing a new springboard for themselves to leap upward.
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Oil continues to fall, with Brent losing 3.5% last week. US House of Representatives has adopted new sanctions against Iran's oil sector, but there is no full reaction to this information yet: the market needs to be convinced that US sanctions will affect the volumes of Iranian raw materials.
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In recent years, the world economy has proven its resilience and ability to adapt to shock situations. Serious problems usually have fundamental causes, such as inflation, interest rates, technological force majeure or the Chinese real estate crisis.
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However, any incident can be extremely dangerous, for example, a blockade of the Strait of Hormuz and a stop in oil production in the Persian Gulf. Currently, major players are seeing a record increase in the volume of call options on oil, which are used to hedge the risks of a panicked rise in prices - the market still intends to move up.
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We are waiting for reports from oil monsters, including TotalEnergies SE, Chevron Corp. and Exxon Mobil Corp., as well as Asian Reliance Industries Ltd. and Cnooc Ltd. Big Oil's production dynamics will be in the spotlight as company earnings stabilize, which means it's time for speculators to step up.
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We will venture to give advice on WTI: if the test of the $80 level fails and the strong protection zone of $83.50 is broken, you can consider buying with the first profit above $87.50-90, but this definitely requires a positive fundamental impulse. A negative scenario can be considered if there is a breakout below $80 - for more details, see our weekly analytical forecast.
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Profits to yβall!