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Why Brent Crude is heading up to $80 a barrel!

by , 02 June 2021
Why Brent Crude is heading up to $80 a barrel!
I believe there is one commodity that can be seen as an indicator for a recovering world economy.

Brent Crude…

Think about it…

We need oil to run just about anything nowadays.

We need oil for transport, for electricity and to run massive operations.

Last year, I was extremely pessimistic and expected the price of oil to drop to $30. Which it did… And this year, my analysis shows the opposite.

In January I predicted oil would head to $70… And it did…

Now with vaccinations in full force, dropping COVID-19 numbers and the re-openings of businesses, economies, travel and trade - we should continue to see oil's price rise higher.

In this article, I'm going to make another bullish prediction on why I expect oil to head to $80 a barrel.

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OPEC is pumping production once again
From May to July, OPEC+ is most likely going to increase its production to over 2.1 million barrels per day.
This is due to the increase in demand during the world mass vaccinations rollouts.
And as America and Europe are recording fewer COVID-19 infections and deaths, this is prompting governments to ease restrictions and re-open their economies again.
And what great timing. Because we will also see a high demand for oil as the driving/flying season begins…
These expectations even managed to get Goldman Sachs to write a note last Sunday saying Brent Crude could still hit $80 per barrel in the fourth quarter of the year.
The weaker US dollar is great for Brent Crude oils price
The next factor is the ever-weakening US dollar.
Side note. Have you seen the South African rand lately? As I type this, it’s trading at R13.80. That’s the strongest it’s been since 2019… Thank you weakening US Dollar!
Now what is interesting is the US dollar has dropped to its lowest level since January at 89.64.Historically, the price of oil is inversely related to the U.S dollar.
That means, when the US dollar runs up, the oil price drops. And vice versa.
And so, the falling of the US dollar index is most likely another major factor for an oil price rally.
Here’s what Juwai IQI chief economist Shan Saeed said:
“A depreciation in the US dollar would add to the uncertainty in the market that would see stronger commodity prices.
“But economic revival and strong consumption post-Covid-19 will support the oil demand recovery”
With these positive comments and factors in play, we’ll see more financial institutions and investors piling into Brent Crude. And this will continue to pump the price up.
Best of all… The charts agree…
Why this Cup and Handle formation is going to send Brent Crude to $80

On the daily chart, Brent Crude Oil has formed a strong Cup and Handle formation (shaded area).
This is a chart pattern which resembles a cup with a handle.
Just like every cup and handle has a brim (high price), so does the above chart pattern. You can see a brim level (breakout level) at $70.00 (black line).
Based on the factors I’ve mentioned today, we can expect the price to break above this brim level.
And when it does, it will attract even more buying (demand) which will send the price up.  
To calculate the next price target, I'll use the High-Low calculation.
Price target = (High - Low) + High
                  = ($70 - $60) + $70
                  = $80
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Here’s how I’ll profit from this 14.28% rally in 2021
First, I'll buy the Brent Crude Oil CFDs and hold it until it hits my target price.
Second, I'll be looking to buy stocks that rally when the oil price runs up. , with Red Hot Storm Trader, This includes stocks like Kumba Iron Ore, Sasol and even Anglo.
Third, Trader X from Pickpocket Trader is scouring for international trades as we speak and is going to take full profit advantage with the oil price rally. I’m talking about companies on his watchlist right now that include BP oil, Brent Crude futures, Exxon and Royal Dutch Shell.
Trade well, 
Timon Rossolimos,
Chief Strategist, Red Hot Storm Trader 

Why Brent Crude is heading up to $80 a barrel!
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