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HomeNewsDespite The Profit-Taking, Oil Prices Are Still Expected To Rise Weekly

Despite The Profit-Taking, Oil Prices Are Still Expected To Rise Weekly

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Oil prices experienced a significant decline of over a dollar per barrel on Friday. This downturn can be attributed to the strengthening of the dollar and the profit-taking actions of oil traders following a robust rally. It is worth noting that crude benchmarks are currently poised to achieve their third consecutive weekly gain. This situation highlights the complex dynamics at play in the oil market, where factors such as currency fluctuations and profit-seeking behavior can greatly impact pricing trends. As the week progresses, it will be interesting to observe how these developments continue to shape the trajectory of oil prices.

By 11:18 a.m. EDT (1518 GMT), Brent crude futures had dropped $1.31, or 1.7%, to $80.05 per barrel. To reach $75.55 a barrel, U.S. West Texas Intermediate crude futures dropped $1.34, or 1.7%.

According to John Kilduff, partner at Again Capital, “it just seems to be some profit taking, with some demand concerns coming back to the front and centre as the dollar rebounds.”

Profit-taking in the market has led to a decrease in oil prices. They are still on track to post a weekly gain despite this decline. This volatility in oil prices is a reflection of the energy market’s complicated dynamics, which are influenced by a number of variables including supply and demand, geopolitical conflicts, and general economic conditions.

Profit-taking is when investors sell their assets following a period of price appreciation in order to lock in profits. When referring to oil prices, it suggests that traders are offloading their oil futures in order to profit from the current increase. A brief drop in prices may result from this selling pressure.

It is crucial to remember that oil prices are still anticipated to conclude the week up despite the profit-taking. This suggests that the market’s general attitude is still bullish. Due to ongoing buying interest and rising momentum, investors’ and traders’ optimism about the prospects for oil prices in the future is most likely justified.

Oil prices

There are various causes for the weekly increase in oil prices. First off, as economies recover and travel restrictions loosen, there has been a gradual rise in global oil consumption. This increasing demand has supported prices and made the market feel positive.

A further factor in the rise in oil prices has been the continued production cuts by major oil-producing nations like OPEC and its partners. These production reductions have supported higher prices by lowering the world’s oil supply and bringing the market back into equilibrium.

Oil prices can be significantly impacted by geopolitical events and conflicts. Price volatility can result from any disruptions to the oil supply, such as war in oil-producing areas or political unrest in major oil-exporting nations. Trading activity can further affect oil prices as traders constantly watch these changes and modify their positions as necessary.

Bottom Line

Russian oil exports have seen a noticeable fall, and if this trend continues in the upcoming week, prices are likely to increase even more. This is because Commerzbank analysts estimate that Russian oil exports would decline by 500,000 barrels per day (bpd) in the month of August. It is anticipated that the impact of this drop in exports will add to the rising pressure on oil market prices.

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