where now for oil? where now for oil? where now for oil?

What's next for oil?

Crude Oil
Ole Hansen

Head of Commodity Strategy

Crude oil has pared back some of the overnight gains that was attributed to another failed missile strike on Saudi Arabia from Houthi forces within Yemen. The price of both WTI and Brent crude oil almost reached the January peaks with a rejection leaving many fresh longs at risk. A break, however, could see WTI target a minimum of $70/barrel.

where now for oil?
Source: Saxo Bank

Last week’s surge was driven by a combination of the technical breakout of the triangle formation and renewed worries that Iranian production and exports could be negatively impacted should Trump decides to reinstate sanctions after May 12.

Against these developments we saw global trade tensions tear into global stocks. This helped create a major and potentially unsustainable dislocation between the two. Additional stock weakness driven by the risk of an escalating trade war could reduce global growth and ultimately this would translate into a lowering of global demand growth for oil. 

Iran and trade tension focus helped trigger a major divergence between global stocks and oil prices last week. 

where now for oil?
For now the risk of lower supply combined with robust demand and a high level of Opec compliance to the agreed production cut deal have triggered another round of speculative buying with hedge funds increasing the combined net-long in WTI and Brent crude oil by 61,000 lots to 1.06 million lots in the week to March 20. The overwhelmingly bullish sentiment can also be seen through the long/short ratio which last week stood at 12.5 to 1, the second highest on record. 

where now for oil?


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.