To the delight of oil-producing countries, oil has recently hit a fresh record high. Brent crude oil futures broke above $75 per barrel for the first time since 2019. According to experts, such a rapid rise in oil prices was due primarily to high demand amid a gradual global economic recovery.
Oil benchmark Brent crude is confidently drifting upwards, hitting new heights. Its recent breakout took the price above the important psychological mark of $75 per barrel, the level not seen since 2019. This growth can be attributed to a fairly large number of factors, including OPEC+ compliance with pledged oil output curbs, a balance between supply and demand in the market, a decrease in crude oil stockpiles, as well as growing global demand.
Notably, the price gap between the world’s two most actively traded oil contracts, Brent and WTI, has narrowed significantly. US West Texas Intermediate crude oil futures for July edged up to $72.09 per barrel. Moreover, the benchmark continues to gain in value.
From a technical point of view, oil prices have already reached overbought territory. Therefore, there is a high probability of a pullback or even a steep fall. A similar pattern of oil dynamics was observed in 2008. The quotes fell (as was the case in the previous year), then rebounded, but eventually tumbled to new lows. This scenario is also confirmed by the Fibonacci retracement levels.
