Baku. 31 August. REPORT.AZ/ The risk of declining oil prices in the global market is higher.
The Head of FX Strategy of the Saxo Bank, John J. Hardy told Report responding to a question about oil prices for the end of the year and the forecasts for 2018
According to analyst conflicting news on production and inventories has kept WTI crude oil hovering around $48.50/b for the past month. So far this August the trading range has narrowed to between $48.50/b to the upside and the 50-day moving average to the downside.
The risk reward however looks increasingly skewed to the downside. A break to the upside could see the market revisit $50/b which would trigger increased hedge activity from US producer while a downside break risks triggering a fourth wave of selling from funds holding the biggest combined net-long in Brent and WTI crude oil since March 14.
Hardy also said the seasonal behavior also has to be considered with a market peak normally seen during the first week of September before the market enters the low demand season.