Last week the price of WTI remained almost unchanged at $44.84/bbl. On September, 1, the price of crude plunged to its weekly bottom of $43.5/bbl. The resistance level is now located at $46.5/bbl, while $42.96/bbl is a relatively strong support level.
The price of Brent crude rose by 0.7% to $47.33/bbl last week. The spread between the prices of Brent and WTI broadened to almost $2.5, and that means more volatility on the crude oil market.
The level of resistance for Brent is at $49-51/bbl. We believe that if the Brent manages to remain above this level, it is likely to rise to $55/bbl and higher.
Baker Hughes reported that the number of active drilling rigs rose only by 1 unit to 407 rigs last week.
Saudi Arabia and Russia at the G20 summit in China on September, 5 said that they will co-operate in order to stabilize the crude market. According to media sources, the two biggest oil producing countries are likely to agree to the freezing of crude production at current levels. This pact could have an impact on the future OPEC meeting in Algeria, where the oil exporting countries could agree on freezing of oil production. The prices of Brent rose by 1.7% on September, 5 when media sources announced the details of the pact.
We expect the prices of Brent and WTI at the next week at the range of $46-48 bbl.