Why Oil Prices Are Back Up? The Signal for Traders

Many analysts had now lost hope but, contrary to their estimates, the price of oil has started to rise again. This morning on the commodity market both WTI and the Brent contract were higher.

More precisely, WTI for delivery in August was trading at 81.27 dollars per barrel with an increase of 0.54 percent compared to yesterday while Brent for delivery in August was quoted at 85.40 dollars per barrel, up by 0.46 percent. In practice, albeit in small steps, the oil price continues its upward trend.

It goes without saying that, operationally, a very interesting situation has been created for investors. After weeks of calm, the ongoing movement in the value of crude oil creates some pretty good entry opportunities.

Good news for traders who invest in oil by resorting, for convenience, to derivative instruments such as CFDs which can also be activated on the platforms of well-known banks as is the case with Fineco.

The factors that can further increase the price of oil and the platforms for investing

The prevailing view among analysts is that oil prices still have room for appreciation. Oil to buy at current prices in view of a further rise? Let’s see in detail starting from a technical data.

Leaving aside the good performance recorded today by crude oil, the most interesting data is the weekly one. In fact, when talking about raw materials, unless you are interested in intraday prospects, the data for the week is the most representative.

So in the week ended June 21st, crude oil recorded a progression. Nothing strange except that the previous week had also closed on the rise. For the first time since September, therefore, oil prices rose for two weeks in a row. This is a clear signal for traders which becomes very clear in light of the new rise taking place today.

The return of the appeal of crude oil is attributed to the strong demand for petroleum products and the decline in US inventories. But there are also some forecasts circulating in the United States according to which as many as 71 million American citizens could travel during the July 4th holidays.

Those mentioned are three bullish factors yet an analyst like Vivek Dhar (Commonwealth Bank of Australia) just recently urged us to stay tight-lipped because it is likely that the US oil market could contract. In a recent report, the expert said that in the short term, lower-than-expected growth in oil demand from China could be the biggest downside risk to take into account. However, according to Citi, at least in the short term, theseasonal increase in demand but also the Tension situation in the Middle East between Israel and the Lebanese Hezbollah and the imminent hurricane seasoncould push the price of oil forward.

This bullish scenario, the bank concluded, could last until late summer. After that, a contraction is more likely due to the long-term factors we mentioned earlier.

On oil prospects we recommend reading:

How to invest in the price of oil

If the short-term scenario is characterized by optimism, there are no doubts about what to do. One possibility could be to wait for a decline and then enter oil with the prospect of a rise in prices.

To do this, as we explain in the article on trading on raw materials, you do not need to buy barrels of oil but you can speculate on the upside (and also on the downside) with derivative instruments such as CFDs. Contracts for Difference are speculative instruments that can be found both on broker platforms such as eToro and on those of banks such as Fineco.

• eToro: allows you to trade with CFDs on many raw materials. Furthermore, with eToro it is possible to use copy trading with which to replicate the strategies of the best traders.

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• Fineco: it is the Italian bank with the best trading platform and allows you to trade oil with CFDs. Fineco offers two types of accounts including trading-only accounts without banking services and without fixed costs.

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