Forexrobots24

forex advisor developer

Crude Oil Trims Recent Gains as Market Flashes Overbought Warning

Crude Oil Analysis, Price and Charts

  • Oil supported by Norwegian strike, Gulf of Mexico disruptions.
  • Hopes of US stimulus bill boost demand.
Advertisement

Brent crude has rallied the best part of 10% this week, driven by favourable supply and demand tailwinds. On the supply side, an extended strike by Norwegian oil workers has crimped production, while vast swathes of the Gulf of Mexico oil industry have been shut down as Hurricane Delta nears. While supply remains under threat, oil will retain a bid although fresh demand will be the driver of the next move. This week US President Donald Trump said that there would be no new stimulus bill ahead of the election, before a quick volte face and comments about targeted stimulus measures and a renewed push for a larger stimulus bill. President Trump is now expected to work with speaker Nancy Pelosi to try and get a bill agreed before November 3.

The daily chart shows how firm the bid for Brent crude has been around $39/bbl. This week’s rally also coincided with a strong rebound off the 200-day simple moving average and a break and open above the 20-dma later in the week. This area of support will likely be difficult to break in the short-term. To the upside, Brent needs to break above the last simple moving average (50-dma) with conviction before it sets up for a re-test of a cluster of high prints all the way up to $46.60/bbl. The CCI indicator at the bottom of the chart is showing crude nearing overbought territory, and at its highest level since the end of August, suggesting a period of consolidation may lie ahead.

Brent Crude Oil Daily Price Chart (January – October 9, 2020)

Crude Oil Trims Recent Gains as Market Flashes Overbought Warning

What is your view on Oil – are you bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.