Oil Testing Lower End Of Range
ETF Daily News | Sep 29, 2020 02:03PM ET
Bullish and bearish factors continue to pull the price of crude oil in opposite directions. On the bullish side, central bank liquidity, government stimulus, a weak U.S. dollar, and the Fed’s willingness to tolerate inflationary pressures support all commodity prices.
Moreover, OPEC, Russia and other world producers are sticking with a 7.7-million-barrel-per-day production cut. U.S. production is falling. According to Energy Information Administration reported that U.S. output stood at 10.7 million barrels of crude oil per day for the week ending Sept. 18.
A shift in leadership in the U.S. could reduce that number significantly, handing more power to the oil cartel and Russia. Time will tell if $40 remains a pivot point for the energy commodity or if 2021 will usher in a period where the crude oil market experiences additional volatility. The U.S. election could decide the path of least resistance of the futures market over the coming months.
On the weekly chart, support stands at $34.36, the mid-June low, with resistance at $43.78, the late August high.
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