FxPro analyst: We should be prepared for oil to return to the $70-80 range

In our view, the move's unexpectedness caused the big swing, as contrary to usual practice, OPEC officials did not indicate that they were considering such a possibility

The week is coming to an end, but as you surely remember, it began with crude oil prices edging higher. FXMAG.COM spoke to Alex Kuptsikevich from FxPro. Crude oil prices have accelarated recently, what could we attribute such increases to?

Alex Kupstikevich: Oil started the week up 7.8% as some OPEC+ members unexpectedly announced production cuts of 1.16m b/d over the weekend. As a result, WTI crude, which had fallen below $64 a fortnight ago, rose back above $80.

In our view, the move's unexpectedness caused the big swing, as contrary to usual practice, OPEC officials did not indicate that they were considering such a possibility

Alex Kupstikevich: In our view, the move's unexpectedness caused the big swing, as contrary to usual practice, OPEC officials did not indicate that they were considering such a possibility. The market opening at the beginning of the week triggered a wave of stop orders.

Alex Kupstikevich: Price impulsively returned to the top of the range where oil had spent most of its time since December before plunging in March.

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Alex Kupstikevich: However, the positive momentum failed to develop over the course of the week. Thursday saw a slight slide lower. This looks like the traditional tendency of markets to close such gaps. Another factor working against oil is the slowdown in the global economy caused by rising interest rates.

Alex Kupstikevich: We should be prepared for oil to return to the $70-80 range. OPEC has a finger on the market's pulse, and we cannot expect a repeat of the 2014-2015 and 2020 collapses.

Alex Kuptsikevich

Financial market professional with 16-years' experience and Senior financial analyst at FxPro. Author of daily reviews on the impact of economic events with comments regularly featured in top international and Russian media. Covers fundamental analysis, global markets, foreign exchange market, gold, oil, cryptocurrencies.

Alex Kuptsikevich is a regular contributor to both digital and print media including CNBC, Forbes, Reuters, MarketWatch, BBC and Coindesk.