Extreme Surge in the Oil Price Secured a Record High Last Week

oil-106913_640There was extreme instability in the in the energy sectors since the price of oil was dropping in the market like falling stone. However, things dramatically changed in the energy sector after OPEC declared a capping in the oil the production. In the last week, the long awaiting pending rate hike decision was settled down in the financial market by the FED.There result of the rate hike decision was as expected and the FED was able to intensify the strength of the U.S dollar in the global market. According to the leading oil price researcher, the stability of the oil price might get effected in the near term future since of the foreign investors might give an extremely positive response to the decision of the OPEC. If things go like this in the near term future then we will see a stable growth in the oil price in the upcoming days which will clearly recover the prolonged downfall in the market. Due to the release of major economic data in the financial industry CFD trading has been extremely tough for some of the foreign investors. The price of West Texas Intermediate crude oil contract settled down at $51.90 a barrel which is near about 2% increase from the contract of January. Such a bullish pullback in the price of oil resulted in $1 increase in the price oil. Considering the overall gain we had a 0.8% in the price of oil in the last week. The price of Brent oil was $55.21 a barrel in the last week which is more than 2.2% according to the contract of February. To be precise price was trading 1.7% higher considering the last week performance in the London’s ICE future exchange. However, price slightly dropped in the market after Libya initiated oil rigging in major two oil fields after the OPEC decision.

The oil was trading significantly higher in the global market after the OPEC stated their plan regarding the capping of oil production in the global economy. On the contrary, the like statement from former U.S president Obama clearly demonstrated that the U.S government has no interest in buying the oil for their reservoirs in the near term future. Such an optimistic statement from Mr. Obama give created a relief in the oil market and investors were in a safe position with their long orders. This also made CFD trading much more profitable in the last week. According to some of the leading economist researcher, the price of oil might start to saturate from this level since the conservative buyers might stay on the sideline for some bearish retracement in the market. According to some leading investors of the global economy, the oil might be the most profitable investment for the year 2017.However, there is a strong conflict regarding this statement since a large group of traders are doubting the perfect implementation of OPEC plan. Though fundamentally the oil is supposed to have the strong rally in the market the market has a strong tendency to surprise the traders. Considering current scenario, the traders have a very good trading position compared to the currency traders since the recent performance of the U.S dollar is significantly good in the global market. But in order to retain the pogoing strength of the U.S dollar, the FED needs another hike in the year 2017 just to maintain the economic balance of their country. The central bank will also be forcing the FED for another rate hike but investors are in doubt whether the FED will go for another rate hike in the next year for making a consecutive rate hike after a prolonged period of time.

Most of the leading oil producing countries in the global economy are respecting OPEC decision since it has brought huge stability in the oil price. After the OPEC declared the major production cut decision Kuwait being one leading oil producing countries in the world notified their customers regarding this factors several times to its customers. Such a drastic action was not taken OPEC after 2008 and they have decided to limit the production oil to 1.2 million barrels per day in the global economy. The retail CFD trading community has become well aware of this event and now they are cautiously buying the oil at a deeper price with a hope to sell it higher level. But some leading investors are thinking that the market is already stabilized at the current moment and the price oil trading at its pick in the recent days. They are expecting a rebound in the market in the near term future which has also created some sort of fear in the global sentiment of the oil traders. But the number of oil rigs in the U.S has not been lowered despite the OPEC strict concern regarding the oil production. This has also created massive confusion in mind of long-term investors. However, the U.S oil rig companies are claiming that they will follow the implement rules by OPEC with a very professional manner and their activities will not create any sort of instability in the global market. The oil market has been stabilized to a great extent in the last couple of weeks and traders are thinking that the stability of the oil price has already been achieved in the global market. Despite so many precise economic events in the global economy, the leading investors are still in doubt about the recent strength in the oil price and they are thinking that the market might be rebound at any time without any prior indication.

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