Oil: Fundamental Vs Technical
Naeem Aslam | Aug 18, 2021 02:50AM ET
Demand-side factors have caused oil prices to fall in recent weeks. Coronavirus cases have been growing globally, forcing hedge funds to sell off portions of their holdings for the sixth time in eight weeks. The reappearance of cases in China, North America, and Europe has softened hopes that long-distance travel will quickly recover from the lows seen in 2020.
On the supply side, the United States is expected to boost its shale oil supply by 8.1 million barrels per day beginning next month. This would be the company's highest output since April 2020. Crude oil inventories data is also set to be released today, which will provide more information on how the demand-supply gap has changed in response to recent developments.
h2 Technical Analysis /h2In terms of technical analysis, crude oil prices are still under the control of bears. This is because the crude oil price is trading below the 50 and 100-day SMA on the daily time frame. Having said that there is some hope for the bulls as the price hasn’t dropped below the 200-day SMA and this is where big buy order are sitting. In addition to this, there are also chances that the price may be forming a double bottom, a highly bullish pattern. However, if this pattern fails and the price drops below the 200-day SMA, we could see a further sell off.
The near support is at 63 and resistance is at 69.56.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.