I can’t believe it’s been a whole month since I last talked about Oil. However, just because I haven’t posted about oil sooner, didn’t mean I wasn’t following it. Quite frankly, it been pretty boring and in the middle of the curve (range). However lets recap from the last post.
So there was demand at $57.25,but the reason that demand failed was because the buyers couldn’t take out and close above the most recent supply. The chart suggests price is headed lower…to levels that I will be watching is the $53.80 level and the $51.96 level.
After Trump announced an additional 10% levy on $300 billion worth of Chinese goods, oil fell more than 7% on Thursday. The reason why the move was so strong and the drop the worst in over several years was because hope quickly dwindled of a trade war agreement kick starting the global economy. But the catalyst for the momentum down was when Fed Powell cut interest rates, but said not to expect more. His language caused the US dollar to move higher and because oil is traded in US dollars around the world, oil started moving down due to it being an inversely correlated asset.
Although price dropped 7% on Thurs, oil prices closed up over 3% on Friday. So why did prices move higher, despite the equity markets moving lower. Lets zoom in on the $53.80 level that I have been monitoring for the last four weeks. Because price hit a daily demand zone at $53.80.
My personal target for oil is now $57.00. Lets see how things transpire next week.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.