The question of the U.S. Debt limit is off the agenda at least for two months after President Joe Biden signed a funding bill to prevent government shutdown and allow funding through to December 3. Investors held their breath last week to see where stock indexes would land, and the answer is they rebounded by 0.82-1.43%.
The new week starts with the OPEC+ meeting amid expectations that the oil cartel and its allies would rise crude production above the scheduled 400,000 barrels per day limit. OPEC+ may revise quotas for November as the demand for crude rose unexpectedly high. Western countries are the most worried about rising crude prices and consider that the additional volumes of crude production may bring prices down sharply. Brent crude benchmark prices recently spiked to $80.75 per barrel.
However, some believe that the gas crisis and soaring gas prices may instigate crude prices to jump to $100 per barrel, and this may spur a global economic crisis, according to the Bank of America cited by Bloomberg.
The price for gas in Europe is already an equivalent to the price of crude at $190 per barrel. Several European gas-consuming companies have filed for bankruptcy. Crude prices have only 10% left from the peaks of 2018. If Brent crude prices would hold above $86-87 per barrel technically such targets could be achieved, and may move Brent crude prices even above $115-117 per barrel.
However, it is too early to dive into wishful thinking as we have the situation now, and now we are at the important crossroads as the resistance line that started in 2008 and is crossing peaks in 2012 and 2014 is crossing the level of $79-80 per barrel, where the current Brent crude price is located. So, price is testing this resistance for the fourth time now, while the last time was in 2014, which makes a huge gap of 7 years. So, we may not consider as certain that this time this test would finally lead to a breakthrough. So, we may not also exclude the possibility that the price would fail to hold above $80 per barrel and would follow the 13-year downward trend. In this case Brent crude prices may plunge to $70 per barrel, at the support line of the trend that started in March 2020.
The new week starts with the OPEC+ meeting amid expectations that the oil cartel and its allies would rise crude production above the scheduled 400,000 barrels per day limit. OPEC+ may revise quotas for November as the demand for crude rose unexpectedly high. Western countries are the most worried about rising crude prices and consider that the additional volumes of crude production may bring prices down sharply. Brent crude benchmark prices recently spiked to $80.75 per barrel.
However, some believe that the gas crisis and soaring gas prices may instigate crude prices to jump to $100 per barrel, and this may spur a global economic crisis, according to the Bank of America cited by Bloomberg.
The price for gas in Europe is already an equivalent to the price of crude at $190 per barrel. Several European gas-consuming companies have filed for bankruptcy. Crude prices have only 10% left from the peaks of 2018. If Brent crude prices would hold above $86-87 per barrel technically such targets could be achieved, and may move Brent crude prices even above $115-117 per barrel.
However, it is too early to dive into wishful thinking as we have the situation now, and now we are at the important crossroads as the resistance line that started in 2008 and is crossing peaks in 2012 and 2014 is crossing the level of $79-80 per barrel, where the current Brent crude price is located. So, price is testing this resistance for the fourth time now, while the last time was in 2014, which makes a huge gap of 7 years. So, we may not consider as certain that this time this test would finally lead to a breakthrough. So, we may not also exclude the possibility that the price would fail to hold above $80 per barrel and would follow the 13-year downward trend. In this case Brent crude prices may plunge to $70 per barrel, at the support line of the trend that started in March 2020.
