Oil Prices Rise for the Fourth Day in a Row

 Oil prices rose for the fourth day in a row today, according to Reuters.

The market ignored reports of an increase in US oil reserves that exceeded expectations and continued to rise in price, hoping for the coronavirus vaccines to improve demand.

Brent crude traded up 66 cents at $48.52 a barrel. WTI crude traded up 48 cents at $45.39 a barrel. Yesterday, both oil indices recorded a 4% increase in value.

Both contracts are at their highest level since the beginning of March and have seen a 9% price increase in the last four days.

According to market analysts, US oil reserves have increased by 3.8 million barrels. This is due to many factors. They include the presidential shift, vaccine boosters, and the expectations that OPEC Plus will extend its production cuts next week. 

Optimism about the vaccine has risen. However, it is likely to be available in the next few months, which means quarantine and travel restrictions will extend until next year.

The Trump administration has given Joe Biden access to resources to seize power in January.

The rise in oil prices is likely to be short-lived

Analysts are worried about a vast accumulated surplus of crude oil that is increasing with each passing week. They think that the rise is explained solely and exclusively by the idea that everything will return to normal after the arrival of vaccines. However, it will take at least one year for the global economy to stabilize. It indicates that the commodity rise will not continue for a long time. The resistance for WTI oil is located at $45 and $47.50.

The Brent markets are also trying to break the upside. The prices surpassed the $47 level. According to analysts, they are likely to go towards the $50 level. Particularly, because people are betting the vaccine will change the overall demand landscape.

Analysts suspect that as soon as inventory data begins to be published in countries that have imposed quarantines, the downward turn could be brutal. However, in the short term, it is very likely that buyers will continue to enter the market.

It indicates that sooner or later, Brent oil prices will end up approaching the $50 level. Taking all this into account, analysts find the idea of ​​buying in the short term interesting, thinking of selling when the rise is exhausted, and it begins to show that it is turning around