Bearish Opportunities in Oil
Crude oil is in an interesting place ahead of this week’s EIA inventories report, due later today. Crude has been grinding higher within a narrow bullish channel over recent months. However, the ascent has been marked by bearish divergence in the RSI indicator Oil has run into selling pressure ahead of a test of the 2021 highs with price now holding back below the 65.52 level. With the MACD indicator having crossed bearish here, there are risks of a move lower if today’s inventories report reflects a surplus. The general risk off tone to markets into the back end of the week is also exerting downside pressure here which could see oil move lower if the equities decline starts to deepen.
Key Data to Watch
The EIA releases its latest weekly update today. Last week, the EIA reported a small build in crude stocks, this time around the market is looking for a 1.5 million barrel increase. If such a build is reported, crude could break below the channel though it would likely take a far higher number to effect a proper reversal. If crude does break below the channel, however, 60.55 will be the first target, ahead of the deeper 57.24 level.
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.