Long-Term Oil Analysis for 2016

Oil is the most watched commodity of the past decades. Here you will learn what has happened to oil in 2016 with future predictions for the rest of the year!

The first half of the year 2016 was marked with some turbulence for the oil market. We would like to sum up the performance of ICE Brent and Nymex WTI for the past 6 months, so let’s take a look at the general crude oil price movements according to the numbers in the official record published by OPEC.

Prices for oil in January and February have plunged to the lowest level since 2003. Continuous excessive supply and increasing signs of a slowing growth in the Chinese economy imposed a great pressure on the oil market. Seasonal lower heating demand in February affected the oil prices as well. Thus, in January Brent fell by $7,03 at $38,90/b, whilst WTI was down by $5,60 to $37,33/b. In February the situation has significantly worsened with Brent price falling down to average $31,93/b and WTI losing its value down to $31,66/b.

The end of the Q1 was better for Brent, though WTI price experienced drop again. Hence, in March Brent reached $33,53/b, while WTI kept on falling to $30,62/b.

The beginning of Q2 signified favorable price changes for Brent and WTI. In April 2016, Brent surged by $6,26 to $39,79/b and WTI ended up by $7.34 reaching $37,96/b. Thereby, traders finally acted bullish towards growing oil prices. Even though in May the oversupply was still persistent, oil futures increased its value by 60% in comparison to past months. Brent price rose by $3,55 to average $43,34/b and WTI price increased by $3,16 to $41,12/b.

June was characterized by the positive trend for the oil prices, creating optimistic expectations for the second half of the year. Therefore, at the end of Q2 Brent rose $4.31 to $47.65/b, while WTI ended up $5.67 at $46,80/b.

Now let’s see what predictions can be made for the rest of the year 2016.

Oil predictions for the Q3/Q4 2016

There are different opinions towards a further destiny of oil. We suggest examining some of them below.

Goldman Sachs and IMF believe that Brent/WTI crude oil prices will reach $50+ in the consequent months. On one hand, it is still unknown whether the price will settle down at this rate with the potential to grow further. On the other hand, the Minister of Energy in Saudi Arabia ensures that oil prices have stabilized with no risk to fall significantly as in the first months of the year. However, we should take into account Brexit negative impact on financial markets that can stop the recovery of the oil market.

If you would like to analyze the oil prices and make your own predictions, best Forex trading platforms can serve as the great exchange of opinions and custom charts about oil in the very context of currency trading.