25.09 - oil at the best price
Oil prices jump to the best level in 4 years.
Those who trade with oil should hate notices an unusual price for the crude yesterday and today as well as it was not only the price that was enormous for the crude, but the gains experienced by the assets were big as well. Almost two percent gain in the span of 12 hours was experienced by Brent that finally breached a very much desired $80 per barrel price point and it looks to us like it is aiming for the next milestone - $100 per barrel price.
Yesterday’s hike for the crude is due to the OPEC meeting that took place over the past weekend. OPEC countries decided to go against Trump’s words who was strongly suggesting that they should take a very close control of the output numbers. And why shouldn’t Trump by worried about that, after all, United States have different brand of oil and it is in their interests to see Brent and Brent futures drop price at an alarming rate.
Oil trading can soon become one of a few hubs for traders who seek to find a calm and risk-free trading asset in a relatively calm field. Euro can become the other, but it is about oil right now.
We think that it is fairly easy to say right now - $100 barrels are possible at this point. Although we haven’t seen prices like this in 4 years already, OPEC and its allies are going to do everything possible in order to squeeze United States from the pedestal at least in oil trading. And while dollar will not like it in any way, it is possible that OPEC are not going to back down for that exact reason.
One more issue of the market lies in the fact that Iran crude is soon to disappear from the market as it is. and it is doubtful to us that the market is going to have some kind of a proper response for the loss of that much crude. And we all know that oil doesn’t really like it when we mess with the output. That is why it is totally conceivable at this moment to say that oil prices as high as $100 per barrel are a complete possibility. Especially given that the supply cut is going to be 5 or even 7 times more that was initially expected.
So? What does this mean for traders? it means that we have two roads to follow right now – we can wait and see whether our assumptions are true or we can get in the game. Fast. And sell with the first sign of weakness.. oh, if only there was a 100 percent guarantee that all of the predictions are going to come true.
But we can for sure say this – oil is going to be at least somewhat stable in the nearest future just because of all of the attention, turned to the crude. So that is why we have to watch it as close as possible right now.
With everything that the social conglomerate has been through this past year, we really hoped that the turbulent times were behind for the giant, but it seems that the trouble are only just starting as various workers begin to exit Facebook with Zuckerberg’s involvement in the users’ privacy scandal.
We are not going to go into the details of the scandal once again. All we need to know now is that the situation repeats itself at the moment. As we know, American midterm elections are coming closer and closer to us. And the closer we get to them in time, the more information on the same misinformation campaign that was spreading via Facebook from the same sources as during presidential elections of 2016.
Even though, according to Zuckerberg, the campaign was spotted fairly early in time and no damage was done to the voters’ opinions it is still suspicious – didn’t Zuckerberg state that that the system is now breach-proofed? Didn’t we believe him? Didn’t we, the traders, lift the shares of his company from the bottom when they lost unprecedented amount of percentage in August. And now what? Is he going to drag us through the same story over again?
Well, it seems that not everyone is ready to just sit there and wait for the stock to crush again even though today the shares’ prices are surging no one know how they are going to behave tomorrow when everyone realizes that various officials from Facebook team started to leave the company. Like, for example, Instagram founders Kevin Systrom and Mike Krieger who have been with Zuckerberg since Facebook’s purchase of Instagram in 2012.
Will other people follow them? We think that it is possible. Just like failing prices for Facebook’s shares in the nearest two weeks are a possibility. Would we pull out? Right now, until there is no sign of real troubles probably no, but being cautious with the stocks wouldn’t hurt for sure.
Although there is another possibility as well. With no founders around, Instagram is likely to get even more integrated with Facebook. We wouldn’t go as far as to say that Instagram is going to be fully ‘eaten’ by the social network, but integration is somewhere around.
All and all together with possible integration and mid-term elections coming near and previous reputation of Facebook we wouldn’t rule out illogical behavior of the Facebook’s stock.
- by Anna K.