Iran sent Brent crude oil to around $39
Yesterday, Brent crude oil was able to demonstrate growth in anticipation of data on the US crude oil inventories. The Brent was able to reach a high of $40.61.
However, the American Petroleum Institute (API) showed increase in crude oil inventories last week: 2,299M vs. forecast 3,300M. It was also reported that oil production fell by 3.9% in the US.
But then we got the report from Reuters, which sent the Brent crude oil to around $39. The report showed that in March, OPEC increased oil production by increasing supplies from Iran, after the lifting of sanctions, as well as the near-record volume of exports from southern Iraq. This increase covered the decline of smaller exporters.
The report also showed that Saudi Arabia hasn’t practically changed the production volumes.
As we can see, the Brent crude oil has gone beyond the price range of $40 - $42, which we forecasted for this week. However, we assume that today the oil will seek to return to the area of $40.
How to trade
We would buy CALL options if the Brent oil rises above $39.05.
Asset: Brent oil
Target price: 39.05
Close price: 39.58
Expiry time: 20:00 GMT