Is oil due a pullback? [Video]
|Oil prices have been supported on a variety of factors over the last few weeks. Low inventories (there was another surprise draw last week), rising demand, increased expectations by the IEA of further demand, and a sharp rise in global vaccination rates have all been supportive.
However, for reasons that are not entirely clear, oil does tend to have a period of weakness from now until the start of December. Is this a perfect time to look for a short term pullback in oil?
Over the last 21 years, WTI crude has fallen 12 times between October 27 and December 17. The average loss has been -5.69%. The largest gain was +21.16% in 2020 in an unusual market and the largest loss was -32.92% in 2008.
Major Trade Risks: The main risk to this trade is of oil resuming its dominant medium-term buy bias. In particular, look out for buyers stepping in at key support at $77.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.