🛢↗ OIL gains on improved outlook 👍

11:50 AM 31 August 2020

Brent oil (OIL symbol) prices have not been in the same style of a wild rally as US indices or precious metals but have been moving consistently upwards for a while. Today OIL gains over 1% to test multi-month highs and there are at least 3 factors behind this move:

US dollar is under a renewed pressure under a speech from J Powell from last Thursday. Since OIL is traded in USD, weaker currency helps price gains.
Less drilling = smaller supply. The number of drilling rigs on the North Sea declined from 18 in 2018 to 11 currently and 3 of those are “cold-stacked” – unable to return to work without a significant expense. This means that it will take more price pressure to restore drilling capacity.
Investors are also betting on continued declines in US oil inventories (inventory data will be released on Tuesday evening from the API and Wednesday 3:30 BST from the DOE)

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