Oil looking for major play


Market Outlook

Oil has been jumping up and down on the charts, but has had a slightly bullish bias to it lately. The reason for that has been somewhat confusing for investors at present as there has been a surplus in the market, but not as much as some people had originally feared when it comes to the American market.

Last weeks 8.43M surplus for crude oil inventories was an increase on the previous month, but oil quickly bounced back within its range. The reason for this is the market is looking for larger surpluses at present to justify further drops. What we have seen regarding oil is that the surplus is stable and unlikely to increase, which in turn has led the market to rally back up to the 50 dollar mark in the short term.

The market has thus far been looking for some sort of correction and it’s unlikely to get exactly that. What is more realistic after a sudden supply shock/demand drop is not a rush back to the norm, but a slow persistent grind back up the chart for oil prices in the long run.

Market Outlook

As can be seen here we saw a sharp sell off in 2008 followed by strong buying over the course of the following year. This is what I feel is the most realistic scenario given the drop in capital expenditure in the oil market, which will reign in future supply in the medium to long term.

But the short term presents golden opportunities for swing trades and the many playing of key levels. Support is strong at 48.71 and it would take a large drop to change that suddenly, it’s likely that this level will remain for some time unless we see oil pushing over 12 million barrels in reports. Plays upwards are likely to find key resistance at certain levels 51.12, 52.63 and 53.96 are where oil will look to push to. A breakout of 51.12 should be seen as a strong bullish signal up to 52.63 where it will be a struggle between the markets and we could see a bounce of this level.

If we fail to see a push through 51.12 then a short here taking a few points is an applicable option and likely what most market players will be looking for.

Overall, oil has so far struggled to find direction and the American trading session has some very volatile candles which shows there is a battle going on out there. But the bulls are looking to take charge and the 51.12 level is the one to watch.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE

EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE

EUR/USD remains depressed below 1.0800, as traders lack directional impetus amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action. 

EUR/USD News

GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday

GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday

GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance. 

GBP/USD News

Gold ends Q1 2024 at record highs, what’s next?

Gold ends Q1 2024 at record highs, what’s next?

Gold is sitting at an all-time high of $2,236, lacking a trading impetus amid holiday-thinned conditions on Good Friday. Most major world markets, including the United States are closed in observance of Holy Friday, leaving volatility around Gold price highly subdued.

Gold News

Ripple's move above this key level could trigger nearly 50% rally for XRP

Ripple's move above this key level could trigger nearly 50% rally for XRP

Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days.

Read more

US core PCE inflation set to ease in February on month as Federal Reserve rate cut bets for June mount

US core PCE inflation set to ease in February on month as Federal Reserve rate cut bets for June mount

The core Personal Consumption Expenditures Price Index is set to rise 0.3% MoM and 2.8% YoY in February. The revised Summary of Projections showed that policymakers upwardly revised end-2024 core PCE forecast to 2.6% from 2.4%.

Read more

Majors

Cryptocurrencies

Signatures