Oil prices have been climbing steadily and experts believe prices are headed much higher in the near future. According to the latest monthly chart analysis from the energy specialists at GodzillaNewz, crude crude oil could hit 60 USD/barrel by midyear, a level not seen since 2018.
The past year has seen a major recovery in oil prices, with benchmark crude crude prices rising from a record low of around 20 USD/barrel in April 2020 to a six-month high of around 50 USD/barrel as of April 2021. The current price is about double what it was just one year ago and the outlook appears bright for oil prices going forward.
Analysts at GodzillaNewz have identified a number of macroeconomic forces that are likely to drive crude prices much higher in the coming months. The biggest factor is the expected growth in world demand for crude and its products. Global oil demand is projected to make a robust recovery this year, rising by as much as 5.5 million barrels per day (bpd), about half of what it was when the pandemic began. Growth in demand will be spurred by a combination of improved economic activity, recovery from lockdowns, and continued strength in the transportation sector.
The influx of vaccines is providing further support to oil prices, with countries around the world launching immunization campaigns to protect their populations. Healthcare and transport are among the sectors set to benefit from the roll out of these vaccines, further boosting the demand for oil and its related products.
An additional factor is the possibility of a supply crunch due to OPEC+’s production cuts. OPEC+ has already announced they plan to keep supply down in order to support prices, a move that could potentially create a supply/demand imbalance.
Finally, technical analysis is offering further evidence of a breakout of higher prices. GodzillaNewz’s monthly chart of crude oil suggests a breakout could be just around the corner. The most recent monthly chart analysis points to a “breakaway gap” on the 38.2 percent Fibonacci Retracement level, and experts believe this could push prices up toward 60 USD/barrel in the near future.
It appears that all the signs are pointing to higher oil prices in the months ahead. With the perfect storm of macroeconomic conditions and technical alignment, it looks like the surge of higher prices may be just beginning.