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Futures expiration puts Crude prices back in spotlight

Gold went above $1840, which is only $80 below historic highs. Meanwhile, the most notable price action was seen in oil. WTI is up more than 3% to 42.40. With a rise above $41.70, oil closed the gap formed by the breakdown of the OPEC agreement and start of the price wars between Russia and Saudi Arabia. Since then, the two large suppliers have become friends again and agree on a roughly 20% production cap.

Futures expiration puts Crude prices back in spotlight

The revival of oil today is easily explained by short-term market reasons. Deliverable futures on the NYSE, where WTI is traded, expire today. Three months ago, this event caused a price collapse and a short-term dip of some futures into negative territory. Now, on the contrary, the increased activity of traders with short-term oil contracts pulls prices up.

These short-term factors force us to evaluate the prospects for further strengthening of prices with intense attention or extra attention. Three months ago, this event became a turning point for the markets.

The FxPro Analyst Team

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