Crude Oil Rally Still Has Legs
Crude Oil Talking Points
- Geo-political backdrop remains supportive for higher oil prices.
- US crude could hit $80/brl in the short/medium-term.
IG Client Sentiment shows that retail traders are net-short US crude oil although daily and weekly positioning has changed. Download our free guide to help you make more informed trading decisions.
Crude Oil Rally Likely to Continue
US crude oil continues to pump higher fueled by a raft of geo-political events as markets continue to price in the cost of upcoming US sanctions on Iran. The US sanctions will be phased in over the next six months. And to add to the bullish sentiment in the oil space, the EIA recently announced that crude oil inventories unexpectedly fell by 2.2 million barrels in the week to May 4, after a modest rise the week before.
A look at the weekly crude oil chart shows the price of crude oil currently trading in a gap created on a weekly candle seen back in November 2014. A close above this gap at $73.25/brl opens up further gains with the 61.8% Fibonacci retracement of the August 2013 – January 2016 move at $79.90/brl the next significant resistance level.The chart also shows little in the way of resistance on the upside although the relative strength indicator is moving into overbought territory which may temper the rally.
Crude Oil Weekly Price Chart in US Dollars (December 2012 � May 10, 2018)
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--- Written by Nick Cawley, Analyst.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.