Brent crude oil dropped after Prince of Saudi Arabia statement
On Friday, the Brent crude fell from $40 per barrel to $38.64 after comments from the Prince of Saudi Arabia. Prince said that Saudi Arabia will agree to reduce oil production, if other countries do the same.
Remind that earlier Saudi Arabia was willing to reduce the oil production even though Iran, which has refused to do. Thus, the probability that an agreement will be reached in Doha, on 17 April has decreased significantly.
Prince hinted that if any country, on the contrary, increases the oil production, Arabia will also increase. Moreover, Saudi Arabia plans to reduce its dependence on oil by creating a stabilization fund, $2 trillion. Of course, these fears are unlikely to cause a fall below $38 per barrel, but they will not allow the Brent oil to grow.
Thus, during the week, the Brent crude oil will be held within the range of $38.30 - $42.50. The oil will be able to reach the top of the range if the US crude oil stocks show a reduction and a further reduction in the volume of production.
How to trade
We would buy PUT options if the price drops below $37.75. We would buy CALL options if the price rises above $38.50.
Expiry time: 20:00 GMT