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Oil Price War Continues As OPEC Tightens The Screws

Published 06/22/2015, 07:07 AM
Updated 07/09/2023, 06:31 AM

Oil Daily

As we come towards the end of another trading month, crude oil price remains firmly range-bound as OPEC’s policy of taking on the alternative energy suppliers in a price war continues. Judging by its recent statements, OPEC is clearly intent on taking the long view to squeeze these companies out of business, and as the rhetoric and oversupply builds, oil prices are likely to continue to remain waterlogged, with intraday movements more likely to be driven either by the US dollar or local fundamentals in the short term. Even the recent transition on the weekly oil inventories from a build to a draw has failed to provide any meaningful momentum for the commodity.

From a technical perspective, oil continues to trade between the ceiling of resistance at the $62 per barrel level above, and a platform of support below in the $57 per barrel region. Last week’s price action tested this level once again with the long legged doji candle of Wednesday, and a clear signal of further indecision ahead. Thursday’s response was weak, with the market attempting to rise on low volume and duly reversing once again on Friday to test the upper level of support in the $59.50 ber barrel area, a level which has held once again in early trading today. These three levels now define the key areas on the daily chart, and until one is breached, we can expect to see further congestion for oil in the short term

Even the recent weakness in the US dollar has failed to provide any momentum for oil, and with the CRB Index continuing to remain heavily bearish, the outlook for oil remains negative.

Latest comments

Thanks for the update Anna. OPEC squeezing competitors out of business over the long term seems to be somewhat successful as I'm hearing more and more oil projects being abandoned due to how unprofitable and unsustainable these projects are. Only the low cost producers will thrive in this environment.
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