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Talking Points:

  • WTI Crude Oil Technical Strategy: Buying Dips Above
  • Crude Oil may approach 100% Fib extension at $53.94/bbl
  • Sentiment Highlight: positioning continues to favor a broadly bullish bias in the near term

The price of Crude Oil is off the highest prices of the month as investors digest a recent EIA report showing the first build in crude and crude products in two months and as they await clarity on OPEC+ (a moniker for OPEC and strategic alliances like Russia.) Traders should note the finish to the year has been kind to Crude recently, and the charts are suggesting we could see a similar rally, but traders may have to put up with the volatility that proves directionless until the Nov. 30 meeting of OPEC and allies has passed.

From a broader perspective, the recent 28-month high in crude oil last week, which was boosted by geopolitical tensions in the Middle East between Saudi Arabia that have led to a presence in Lebanon as warnings by the Saudi Royal court against Iran have escalated. Another key piece of industry news that provided price volatility, but may prove directionless in the end, is that Norway’s global leading sovereign wealth fund with $1 trillion in assets has proposed shedding their energy-intensive oil and gas stock portfolio. Their energy exposure is worth by nearly $35 billion, and this move would be to reduce concentration risk should an adverse energy price shock happen again. Another concern over the week came when the IEA reduced their demand forecast and said that $60

From current pricing, a hold of a daily close above the $54 figure (highest close in February) opens the door for a challenge of $52.83-53.94/bbl (September high, 100% Fib extension). Alternatively, a reversal and close back below $50.18 exposes $49.13 (October low, trend line pivot). A hold above support could keep price pushing to the top of the price channel or extend to the 1.618% Fib extension of the Aug-Sep. extremes to $59.08

Unlock our Q4 forecast to learn what will drive trends for the Euro and the US Dollar through year-end!

Crude Oil Drops On Inventory Build, OPEC Plans but Trend May Continue

Chart created by Tyler Yell, CMT. Tweet @ForexYell for comments, questions

WTI Crude Oil Insight from IG Client Positioning: Pickup in long positioning favors resistance on price advance

The sentiment highlight section is designed to help you see how DailyFX utilizes the insights derived from IG Client Sentiment, and how client positioning can lead to trade ideas. If you have any questions on this indicator, you are welcome to reach out to the author of this article with questions at tyell@dailyfx.com.

Crude Oil Drops On Inventory Build, OPEC Plans but Trend May Continue

Recent changes in sentiment warn that the current Oil - US Crude price trend may soon reverse lower despite the fact traders remain net short.

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Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

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