Jump to content

Crude Oil Soars to New Heights Despite a Strong US Dollar. Where To For WTI?


MongiIG

Recommended Posts

CRUDE OIL, US DOLLAR, RUSSIA, UKRAINE, OPEC+, WTI - TALKING POINTS

  • Crude oil prices run higher as supply and demand factors face off
  • Supply issues remain a problem as OPEC+ are unable to deliver
  • Energy demand increases loom as the northern winter hits. Will WTI rise?
Oil climbs as dollar slumps; gains capped by pandemic surge | Reuters

Crude oil has continued on from last week’s gain in Asian trade on Monday. With northern hemisphere storms brewing, geopolitical concerns, supply constraints and option hedging all in play, the energy commodity appears to have little choice for now.

Tensions continue to rise around the Ukraine-Russian border as Moscow orders more troops to the area. A conflict in this region could undermine European energy sources and has added to global oil supply concerns.

The Pentagon has de-classified a number of military intelligence reports showing the build-up of weaponry. They have also pointed toward a mis-information campaign within the Ukraine that they say has been orchestrated by Russia.

A number of analysts and commentators have made calls for oil prices over $100 bbl in the last few weeks. With OPEC+ unable to deliver in full on their output increases of late, their forecasts are drawing near.

On Wednesday, OPEC+ are due to discuss output targets at their scheduled meeting.

Above $90 bbl may see option underwriters start to hedge their exposure. According to data from Bloomberg, the number of calls that have been written far outweigh the number of puts above $90 bbl.

This would lead to buying of oil as the price accelerates north. Once the price has moved up through various thresholds and the options have been hedged, if the price is to fall, then the hedging of these options will see those same buyers turn around and start selling. This could add further to price volatility.

 

CRUDE OIL TECHNICAL ANALYSIS

WTI crude oil traded at its highest level since October 2014 on Friday.

The move up has nudged against the 21-day simple moving average (SMA) based Bollinger Band but it has been unable to close outside the upper band. This could indicate that the market is comfortable with the rate of change in the rally.

On the topside, resistance may be offered at the recent previous high of 88.84.

The 10-day simple moving average (SMA)is currently just above a prior pivot point at 85.90 and might provide support.

Previous lows and pivot points of 81.90, 79.33, 77.44, 74.96, 74.76 and 73.34 could also provide support.

CRUDE OIL CHART

Chart created in TradingView

 

 

Written by Daniel McCarthy, Strategist for DailyFX.com. 31st Jan 2022

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • The current market indicates that ERC-404 has the potential to be a game-changer. Because of the combination of ERC-20 (token) and ERC-721 (NFT) features, it is unique yet easy to draw attention to itself. As PANDORA has generated quite a bit of excitement and produced a number of millionaires, I'm hoping BEANS can do the same. But keep in mind that the cryptocurrency market is unstable, so do your homework before investing in BEANS or other tokens.
    • It's exciting to think about the possibilities of copy-trading. But it's like a double-edged sword: it can make you an easy profit, but it can also lead to the loss of all your money. Consequently, in order to make profits  and avoid losses, you must select the appropriate elite trader to follow. And DYOR is, in my view, the most effective technique to accomplish this.
    • Elliott Wave Analysis TradingLounge Daily Chart, 26 February 24, AAVE/ U.S. dollar(AAVEUSD) AAVEUSD Elliott Wave Technical Analysis Function: Counter Trend Mode: Corrective Structure: Zigzag Position: Wave ((B)) Direction Next higher Degrees: Wave II of Impulse Wave Cancel invalid Level: 47.34 AAVE/ U.S. dollar(AAVEUSD)Trading Strategy: Correction of wave 2 in the Zigzag pattern. Price is currently pulling back in wave B before falling again in wave C. The overall picture is still in an uptrend but is correcting to continue upward. AAVE/ U.S. dollar(AAVEUSD)Technical Indicators: The price is above the MA200 indicating an Uptrend, Wave Oscillatoris a bullish Momentum. TradingLounge Analyst: Kittiampon Somboonsod, CEWA Source : Tradinglounge.com get trial here!         Elliott Wave Analysis TradingLounge 4Hr Chart, 26 February 24, Bitcoin/ U.S. dollar(BTCUSD) AAVEUSD Elliott Wave Technical Analysis Function: Counter Trend Mode: Corrective Structure: Zigzag Position: Wave ((B)) Direction Next higher Degrees: Wave II of Impulse Wave Cancel invalid Level: 47.34 Bitcoin/ U.S. dollar(BTCUSD)Trading Strategy: Correction of wave 2 in the Zigzag pattern. Price is currently pulling back in wave B before falling again in wave C. The overall picture is still in an uptrend but is correcting to continue upward. Bitcoin/ U.S. dollar(BTCUSD)Technical Indicators: The price is above the MA200 indicating an Uptrend, Wave Oscillators a bullish Momentum.    
×
×
  • Create New...
us