News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • China to promote US trade ties based on mutual respect, China to keep Yuan basically stable at reasonable level -BBG
  • China plans 3.65 trillion Yuan of special local government bond sales in 2021 -BBG
  • China sets 2021 GDP growth target at above 6%, aiming to add more than 11m urban jobs in 2021. Plans 2021 budget deficit at 3.2% of GDP vs 3.6% a year ago -BBG
  • 🇵🇭 Inflation Rate YoY (FEB) Actual: 4.7% Expected: 4.7% Previous: 4.2% https://www.dailyfx.com/economic-calendar#2021-03-05
  • BoJ's Kuroda: Not in state to say BoJ will widen yield target band, BoJ needs more discussions on the yield band -BBG
  • BoJ's Kuroda: Won't hesitate to add easing if needed, will mull further extension of virus program if needed. There is a need to keep yield curve low -BBG
  • RT @FxWestwater: Dow Jones Sinks Below 31,000, $AUDUSD Trendline Breaks as Yields Surge Link: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2021/03/05/Dow-Jones-Sinks-Below-31000-AUDUSD-Trendline-Breaks-as-Yields-Surge.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/UJSmMJx…
  • BOJ's Kuroda says stock market reflects economy and business outlooks - BBG
  • Heads Up:🇵🇭 Inflation Rate YoY (FEB) due at 01:00 GMT (15min) Expected: 4.7% Previous: 4.2% https://www.dailyfx.com/economic-calendar#2021-03-05
  • The British Pound’s recent slip lower against its major counterparts may prove short-lived. Key levels to watch for GBP/USD, GBP/JPY, GBP/CHF and EUR/GBP. Get your $GBP market update from @DanielGMoss here:https://t.co/Y48cF2qi9M https://t.co/4IINZf3zrn
Crude Oil Rally Stretched, Risk of Possible Correction Ahead

Crude Oil Rally Stretched, Risk of Possible Correction Ahead

Justin McQueen, Analyst

OIL HIGHLIGHTS:

  • Crude Oil Prices Extend Rally as Tighter Supply Underpins
  • Oil Technical Levels to Watch

Crude Oil Prices Extend Rally as Tighter Supply Underpins

Oil prices have gone from strength to strength in recent months, as market participants look to a brighter 2021. That said, the acceleration in the move higher has stepped up with Brent crude futures breaking out since the move above $60, having last week recorded its 4th consecutive weekly gain. Among the primary reasons for this supercycle move higher across oil prices has been a reduction in oil supply, particularly from OPEC+. While record winter storms hitting Texas oil supplies the possibility of strikes in Norway, threatening the country’s oil production have added a fresh impetus this morning.

However, going forward, in light of the steep rise in oil prices, questions will remain as to when OPEC+ will begin to raise oil output, particularly Saudi Arabia, who last month agreed to cut oil production further, by an extra 1mbpd. Over the weekend, Russian Deputy PM Novak (Former Energy Minister) stated that oil prices could average $45-60/bbl, adding that the global oil market is now balanced. Alongside this, with US oil rigs coming back online, this signals that US oil production will be on the rise once again and thus, OPEC may have to mull raising oil production in order to maintain oil market share.

Oil Forecast
Oil Forecast
Recommended by Justin McQueen
Download our Oil Forecast
Get My Guide

Oil Technical Levels to Watch

On the technical front, the RSI on the daily timeframe is at extremely overbought levels, which in turn, reduces the appeal of new longs in the asset and does instead increase the likelihood of a short-term correction in prices. On the topside, resistance resides at $66, which coincides with the 38.2% fib from the ATH to the 2020 low.

Brent Crude Oil Chart: Daily Time Frame

Crude Oil Rally Stretched, Risk of Possible Correction Ahead

Source: Refinitiv

Much like Brent crude, WTI is also nearing critical resistance, which could pose a short-term challenge to the current rally in the oil complex. Trendline resistance stemming from the all-time peak will be a key level to watch with the momentum in oil prices looking slightly frothy at current levels.

WTI Crude Oil Chart: Weekly Time Frame

Crude Oil Rally Stretched, Risk of Possible Correction Ahead

Source: Refinitiv

Oil - US Crude BULLISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -23% 24% 2%
Weekly -13% 5% -2%
Learn how to use Sentiment in your trading strategy
Get My Guide

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES