When Headlines Scream Oil Price to Reach $100, Skepticism is Called For
Crude oil price, news and analysis:
- As outlined on DailyFX yesterday, there are good reasons to argue that crude oil prices have further to rise.
- However, media headlines declaring that $100/barrel is plausible need to be treated with caution and even as a contrarian indicator that the peak is close.
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Beware $100 oil price predictions
A Google news search for “oil at $100” reveals that a crude price of $100/barrel is now being widely predicted. From specialist sites and respected news agencies to down-market tabloids, that key psychological level is seen as reachable even though the price of global benchmark Brent crude would need to advance by almost 25% more for it to be hit.
Brent Crude Oil Chart, Daily Timeframe (February 24 – September 27, 2018)
As DailyFX readers will know, we generally take a contrarian view of retail trader positioning and the same is arguably true of newspaper, website and news agency headlines. This is not to say that oil's strength will ebb away near-term and US investment bank Goldman Sachs has already cast doubt on the more optimistic forecasts. Still, caution is called for and traders would be wise not to get too carried away and to treat the headlines with a healthy dose of skepticism.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.