Does the oil price still have room upwards?
Does the oil price still have room upwards?
The oil price was undoubtedly the absolute winner of the past week. The 'black gold' managed to increase a few percent in value as a result of Trump's decision to break the nuclear agreement with Iran. Does the oil price have more potential?
The situation on the oil market is dominated by demand on the one hand and supply on the other. And it was precisely on the supply side that it was major problems in recent years. For example, there was oversupply on the oil market and as a result the oil price fell by 75% between 2014 and 2016. As a result of the organization of oil countries (OPEC), this oversupply has been reduced and as a result the oil price is again above the limit of $ 70.
Optimism around the oil price was not so great even in 2014
For the investors among us who have missed the 'oil boat', the question is whether the oil market is still interesting at the moment. On the graph above, from TopDownCharts, you can see at least that there is extreme optimism around the oil price. Even in the year 2014 there was no such great optimism. And in that year the starting signal was given for the disastrous crash.
As far as the oil price is concerned, this does not seem to be the ideal time to speculate on a further increase. Despite that, there are still enough energy companies that have lagged behind on the oil rally.