Crude Oil Prices Likely to Remain Positive in the Long Term on Supply/Demand Dynamics

In addition, another impressive data report pushing Brent crude prices above $45 a barrel is the recent better-than-expected American manufacturing activity data released on Tuesday.

August’s Manufacturing Purchasing Managers Index (PMI) spiked to 56, beating July’s reading of 54.2 and the 54.5 forecasts. An increase in new orders boosted the index surge to its highest point in more than a year.

However, the odds for a pullback in oil prices are relatively high as for obvious reasons crude oil bulls seem to be out of steam coupled with the US dollar bouncing up from its two years low.

Crude oil traders see a short-term pullback, as a buying opportunity on the bias that crude oil prices are likely to print higher, and in the case for Brent crude, it may ultimately surge towards the $49 per barrel price level.

However, traders are aware that for such to happen, the COVID-19 caseloads must reduce and the rising tension between the U.S and China subdue.

On the supply/demand dynamics Brent crude is likely to remain positive in the mid-term and long-term supply and demand trends suggesting that Brent crude is most likely to remain above the $43.50 price level in the near term.

But with the COVID-19 vaccine at least months away from hitting the market coupled with low volatility conditions in the present fragile energy market, bulls are out of gas carving out a new higher range above the $46.50 per barrel price level.

Also, oil traders are not in a hurry in taking more bullish bets on the basis that crude oil volatility in recent times has been squeezed and the market is very tight range.