Oil Futures: Calm before the storm – Charles Schwab
|Oil futures prices have been trading in a relatively tight price range so far this month with the lead month September futures showing a trading range of less than $3 so far in July. The recent increases in demand may begin to wane as the coronavirus outbreak could cause nations that are seeing rising cases to halt or even pull back on the reopening measures, per Charles Schwab.
Key quotes
“OPEC is expected to reduce its production cuts by about 2 million barrels per day to 7.7 million barrels per day starting August 1. However, OPEC has cautioned that oil demand could fall if the next wave of the coronavirus outbreak is not contained.”
“Looking at the daily chart for September 2020 Crude Oil futures (CLU20), we notice the market forming a rising wedge formation that began in early June. This chart pattern is generally considered a bearish formation but confirmation of a breakdown in prices from the pattern is needed for confirmation.”
“We note a bearish divergence in the 14-day RSI as this momentum indicator has been trending lower despite a moderate up-move in prices overall.”
“The March 6 chart ‘gap’ at 42.49 remains unfilled and looks to be the next major resistance level for the September futures. Chart support is seen at the 50-day moving average, currently near the 34.64 price level.”
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.