I woke up in the morning just to see the headlines “Oil Drops to 21-Year Low With Storage Filling as Demand Shrivels”. Ever-since OPEC and its allies agreeing to cut production by 9.7 million barrels per day, Crude oil continuing its downward journey.
Now with One ounce of Gold one can buy 83 barrels of Crude Oil. Gold-Oil Ratio is at the historical peak as the FED keep their money printing to stimulate the economy.
WTIC Crude is showing signs of strong momentum on Friday it is up by 4% during the U.S session. Since 22nd Nov 2018 crude is trading in a consolidation band of 50-54 range with couple of times testing the psychological reference zone 50 levels. And now price is trading in the upper end of the consolidation with stronger momentum which indicates potential higher prices in the shorter term.
WTIC Crude in the International market had lost more than 24% in the last two months due to too many negative factors. WTIC crude oil dips below $55 to its lowest level in a year, extending a record losing streak. Sentiment went really extreme negative when US President Donald Trump tweeted “Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!”
WTIC Crude currently trading around 66.13 and local MCX Crude futures trading around Rs4203/ barrel. Current leg of uptrend is almost 7 month old without any steeper corrections. Recent exponential rise are widely believed to be from the tighter supply weak dollar and extreme short term speculators. Short term sentiment is negative which could drive the WTIC price lower to 64 and 62.5 levels.
Crude Oil is trading in a very tight range. Very short term trading sentiment turns positive and trend line resistance comes around 49.2 reference where more crowded stops are visible in that reference point. And few more stops are visible around 50.2 zone.
Last week’s shocking spike in crude oil prices is +12% and counting, the biggest one-week gain in five years. Media stories blame one culprit: the November 30 OPEC agreement to cut production.
Crude is trading around $50.80 & as we can see on charts it is trapped in a range & producing a symmetrical triangle pattern. Generally these patterns appear before a big move & provide a either side breakout in 50-75% length range. Candlestick pattern are neutral with RSI. Decreasing volume from last few weeks hint for the same.
Out with the old: Super Commodities such as Gold, Silver,Oil etc are in a so-called secular bear market that may stretch for years.Remember the commodities supercycle, that seemingly endless 2000s commodities boom? It drove oil, gold, copper and other commodities to record levels may be moving out of order
price closed the week on a positive note in the last trading session of the week. After making the low of 4691 crude bounced back strongly on 5th November and closed the week at 4861. Crude oil price has strong support area of 4840-4830 if on Monday trading session crude oil price manage to sustain this level of 4830 and above expect a sharp rally towards 4951 and there after to 5100.
Now crude is trading around $92.40 & the bounce $90 mark is well supported by many factors like 261.8% February retracement. , a lower trendline of descending channel as well as a very strong positive divergence. All this together providing a buying opportunity at current level.
Now Crude Oil is trading around $94.30 & as we can see on chart, as crude bounced back from $92.50 mark & this area providing support since may 2013. We have witness consecutive 3 bounce from here & there could be 4th one now. Apart from this, crude is getting support from 161.8% February correction .In last few days we also observe a bullish construction on candlestick pattern. A Lower trendline support & positive divergence proving more strength probably.