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by Martin on October 21st, 2021

Oil Prices are Correcting Towards the End of the Week After Updating 3-year Highs

On Thursday, October 21, oil prices are down 0.96% and are trading near $ 85.13 a barrel. December Brent crude oil futures are at $ 84.94, November WTI crude oil futures are down 0.73% to $ 82.81.

After rising above $ 85 / bbl and renewing highs since 2018, oil is moderately correcting in price, retreating from previously reached highs, as some investors take profits from the recent rally. However, strong demand in the United States and the switch to fuel oil from coal and gas amid the global energy crisis helped contain the losses of “black gold”.

Meanwhile, analysts are beginning to speculate that Brent crude could hit $ 90 a barrel later this year, as tensions in global oil markets may persist as US decarbonisation efforts limit oil production growth while demand continues. grow as more energy companies switch from coal to gas, which is still at all-time highs.

Meanwhile, oil producers are ramping up production to meet growing demand in Asia, Europe and the United States, but plant maintenance and high natural gas prices are likely to hold back supply in the fourth quarter of 2021. Thus, the execution of the OPEC + deal in September amounted to 115%, largely due to the fact that there is a lack of financing for the oil industry in African countries, and many infrastructure facilities require maintenance and repair.

Published Wednesday, data on US crude oil inventories from the US Energy Information Administration (EIA) showed a decrease in inventories by 431 thousand barrels in the week to October 15. While analysts were expecting an increase in inventories by 1.857 million barrels, and in the previous week, an increase in inventories was recorded by 6.088 million barrels. However, gasoline inventories fell by 5.368 million barrels, which significantly exceeded both the decrease in inventories by 1.958 million barrels a week earlier, and the forecasts of a decline from analysts by 1.267 million barrels. Distillates fell by 3.913 million barrels, which also turned out to be a larger decline in inventories than last week at 24 thousand barrels, as well as a forecast of a decline from analysts at 700 thousand barrels.

The price of Brent crude is at the support line of $ 85 per barrel and is trading at $ 85.13. Stochastic lines are in the overbought zone, which indicates limited growth for the instrument in the short term.

Non-ferrous metal prices are growing at auction on Thursday. Gold quotes are growing by 0.03%, being at the level of $ 1,783.69 per troy ounce.

Gold (GC). Gold quotes are above the support line at $ 1750 and are trading at around $ 1783. Stochastic lines are reversed and directed upward, which indicates a favorable situation for buying the instrument in the short term.

By Martin

Martin is a professional trader with 3 years of working experience in a Cyprus-based brokerage. After the experience, he moved to the UK where he became a financial news reporter at a local news outlet. His years of trading experience help him deliver the most quality news, while also analyzing its impacts on various markets.

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