Oil is rising for the seventh straight week due to a variety of reasons:
one. Investors are still hoping for a new stimulus package.
2. OPEC + has reached a compromise agreement that provides for an increase in production by 500,000 barrels per day (starting next month).
3. Covid-19 vaccination has begun in the United States today.
4. At night off the coast of Saudi Arabia, another tanker exploded. The fire was extinguished, the ship received minor damage, however, this is the second case this month, which cannot but raise concerns about stability in the region.
To date, futures for WTI crude oil are trading near 6-month highs – now 1 barrel of slurry can be bought for $ 47.17.
But is it worth buying black gold at relatively high prices?
I do not see sufficient grounds for buying oil at relatively high prices yet. in addition to factors indicating continued growth in prices for black gold, there is also a downside to the coin.
First, vaccination is a long process, and the epidemic cannot be stopped in one fell swoop.
Secondly, the market ignored the news of a significant increase in stocks in storage facilities.
Third, we should not forget about Iran, which could be lifted from sanctions if Tehran returns to “strict adherence to the nuclear deal.” This could happen after Joe Biden’s inauguration.
Light oil technical analysis (CL).
On the four-hour chart, the bulls were able to gain a foothold above the mirror level of 44.00, so until the quotes return below it, there can be no talk of any long-term sales.
But it will be possible to take a closer look at short-term sales after the breakdown of the local trend line and support at 46.35. In this case, the closest target level for profit-taking will be 44.00.
Have a nice start to the trading week and more profitable trades!