The rates continue within the uptrend that was formed at the end of April, after the price fell below zero. The recovery in prices turned out to be more extensive than expected, as new supporting factors were added every month.
At the end of July, prices exceeded the $40 mark, but conditions for further growth are becoming more unfavorable. Prices are still rising today, for the fourth day in a row. The key drivers of growth are the large-scale weakening of the dollar and the growth of stock markets, which allows investors to expect that incentives for the financial sector will allow companies to remain stable amid the pandemic. In addition, the reduction of oil extraction in the United States, which is not profitable with current price level, encourages price growth. Therefore, the number of drilling rigs has fallen to the lowest level in 11 years. At the same time, as the autumn approaches, there are fears of a second wave of pandemics and the return of countries to a strict quarantine regime, which could once again knock out oil prices. Furthermore, the incidence of Covid-19 is already breaking records, although investors are still trying to ignore this fact.
We believe that in the current situation, the deals to SELL will be most effective in the long term, but in the short term, it is still possible to make a profit from deals on the trend, before the beginning of the price correction or any trend reversals.
