We know that cryptocurrencies, electric car shares and the US President are all trendy topics, but crude oil remains the engine that – at least for now – makes the world go round. So, there’s no wonder that every piece of news regarding this commodity draws plenty of attention. Oil price may not produce cute Instagram pictures, but for many investors, it’s still the first thing they check every morning.
Now, according to Bloomberg, hedge funds investing in oil are reeling in cash at the fastest pace in over a year. Last year, commodity funds have witnessed major client outflows, but now, it appears that they are recovering.
Crude oil prices have risen to levels which we haven’t seen since 2014.
What motivates current trends? Possible reasons include:
- Geopolitical tensions mount
- Growing confidence in global economy
- Decreased production
Meanwhile, companies like Commodities World Capital and Westbeck Capital Management are speculating that oil prices could surpass $80, reaching as high as $85 thus year. Are they right or is it wishful thinking? Only time will tell, but as is always the case nowadays, there are many factors that could be game changers.
Want an example? Well, let’s talk about President Trump. After a substantial uptrend, on Friday, the US President slammed OPEC. Can you guess where? That’s right – on Twitter. He accused OPEC was artificially boosting oil prices and that this will not be tolerated. Following his tweet, oil prices fell about 19 cents. The President’s threat to abandon the Iran nuclear deal and declining oil output in Venezuela are additional factors worth considering.
For energy traders, this is a good time to keep a close eye on the charts. So far, the popular commodity is up by over 12% since the beginning of the year, but at 68 it’s still a long way from 85.
Think you know where oil is heading to next?
At iFOREX you can invest in oil CFDs, as well as in hundreds of other instruments, and can Sell or Buy, potentially taking advantage of price change in any direction.
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