March crude oil traded lower, ending the week in the lower part of the week’s trading range. It was a fairly non-eventful day today in crude oil, as bearish supply fundamentals pressured the market as pleas for an emergency OPEC – non-OPEC meeting were muted for the day. The Venezuelan Oil Minister is to meet with Saudi Arabia’s Oil Minister on Sunday in an effort to gain their support for production cuts. Saudi support for production cuts is paramount, as they will likely bear the brunt of these cuts, in my opinion.
The March contract made its’ high in the early morning, trading to 32.45, before grinding lower, trading to a low of 30.63 and settling the week at 30.89. Without Saudi support for production cuts, I think crude oil will resume its downtrend. I would like to buy the March 28.00 – 25.00 put spread. Consider paying $300 for the spread, plus commissions and fees. In my opinion, if Saudi Arabia doesn’t agree to emergency talks, crude oil will test the lows at 27.56. Trading below this level could take price to support at 26.09, in my opinion.
CLH16
High – 32.45
Low - 30.63
Last - 30.89
Pivots for 2/8/16:
R2 33.14
R1 32.02
PIVOT 31.32
S1 30.20
S2 29.50