Oil: Prices are undervalued given the current supply uncertainty - Rabobank
|"The oil market is setting up for further gains this week after posting another series of higher highs and higher lows," argued Rabobank research team. "Supply-side worries have increased on the margin and geopolitical risk from Venezuela, Iran, Libya and Nigeria is starting to get priced in to the futures curve along with a slowdown in US production growth."
Key quotes
"Looking forward we remain highly convicted that prices are undervalued given the current supply uncertainty. The geopolitical risk premium in the market is increasing but has yet to be fully priced in our view. Our base case forecast is for Brent to be trading in the high-60s in the coming days with upside risks should we see further disruption to supplies."
"Market technicals are also pointing to further upside as we breakout from the coiling pattern we have been in for the last four weeks and momentum buyers flip from short to long. The 200-day moving average of $71.41 in the prompt Brent continuous contract should provide strong resistance above, but that still leaves another $6/bbl before we test those levels."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.