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WTI on the defensive, falls below $ 42.00 although still remains in the uptrend channel

  • Oscillating crude oil market conditions have seen WTI swing from Friday’s highs above $ 42.00 to current levels around $ 41.80.
  • The news on the supply side remains mild and the space associated with crude is mainly traded on the basis of broader risk appetite.
  • Despite the recent dip, WTI continues to trade within an uptrend channel, implying more likely gains.

WTI futures for the first month they have been oscillating on Friday, moving from highs near $ 42.40 during European morning, only to sharply reverse course in recent trade below $ 42.00 and currently at $ 41.80. As it stands, first month WTI futures were down about 0.1%, less than 10 cents on the day.

WTI price action is based on a broader risk appetite

Supply-side news was sparse for crude oil on Friday, and this could remain so until the month-end OPEC + meeting, during which markets will know for how long, or even if, the cartel will choose to extend its current production cut. The consensus among OPEC + nations appears, for now, to be for at least a 3-month extension of the current pact, which is scheduled to expire in January 2021.

Therefore, the WTI has followed trends in a broader risk appetite, which has also lacked a strong directional bias.

WTI trading in range, appears to break below recent uptrend

WTI has been pretty tight since Thursday, spending most of its time in the last 36 hours between $ 41.50 and $ 42.00. However, the US benchmark for light sweet crude appears to be operating within an uptrend channel, the upper limits of which link the 17, 19 and Friday highs and the lower limits link the 13, 19 lows. 17, 19 and Friday.

With broader risk appetite undecided for now, crude appears poised to continue along this trend line for the time being, meaning the path of least resistance appears to be a pullback above $ 42.00 before a possible one. second test of Friday’s highs at $ 42.28. A test of this week’s highs at $ 42.68 would require a breakout above WTI’s recent uptrend channel and is therefore less likely in the near term.

1 hour chart

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