By Jameel Ahmad, Global Head of Currency Strategy and Market Research at FXTM, ForexTime
The breaking development that transpired throughout the weekend, where attacks on Aramco Oil plants in Saudi Arabia could take away up to 5.7 million barrels per day from the Kingdom’s production has led to a flurry of views that the Oil price could spike as high as $100 over the coming weeks.
This view is encouraged by concerns that the attacks on Oil plants might provoke an intense escalation in a region that is already sensitive to geopolitics, but it is still not clear what caused these fires and how this happened, before deciding into a portfolio what impact this could have on valuations.
US WTI concluded the week just below $55 and to expect a move to $100 from here is ambitious, though confirmation that it will take weeks, and not days to replace this removal of Saudi production can encourage a move to $60.
Looking at the technicals on the Daily charts, Oil prices have suffered more than 3 days of successive declines and found short-term support at $54. As long as prices do not fall below $54 we can look for a rebound from recent declines.
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