x
Breaking News
0

Crude Oil: A Crouching Panther

By RoboForexMarket OverviewAug 28, 2017 10:54AM ET
www.investing.com/analysis/crude-oil-a-panther-crouching-for-a-spring-200209935
Crude Oil: A Crouching Panther
By RoboForex   |  Aug 28, 2017 10:54AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

What do we see when we look at the chart with the price behavior of one or another trading instrument? We see the result of several decisions and actions. But decisions aren’t made without reason. They are made under the influence of expectations, opinions, and analytical conclusions from observations and calculations. But in addition to that, the chart may show the general feeling of market players.

So, what can the chart with the Brent price dynamics over the last four years tell us? The decline started in February 2013 and stopped in January 2015. Since then, the market has been correcting the previous decline. If the first year of the correction looked like an uptrend, then this year it looks more like a downtrend.

Weekly Brent Oil
Weekly Brent Oil

However, inside this descending correctional structure, we can see a local ascending tendency. As a result, we can see the situation, when the newly-formed rising impulse may break the descending tendency on the more global scale. The only deterrent is the level of 54.90 (the high reached on May 25th 2015). It means that after reaching this level, the market may be slightly corrected, but then continue its growth. In this situation, one of the most difficult tasks is to predict upside targets, because this growth is likely to be only mid-term. The closest upside target might be the high reached on January 3rd 2017 at 58.50.

Daily Brent Oil
Daily Brent Oil

So, what can influence the development of the uptrend in the short-term? According to the EIA (the US Energy Information Administration), the Crude Oil Inventories in the USA lost almost 13%. Also, they reported on the US Oil Rig Count, which reduced as well. May be the decline in the oil prices forced American drilling companies to slow down a bit. In addition to that, there were some speculations that Exxon Mobil Corp. (NYSE:XOM). Would close one of its largest oil refineries in the USA. Some political issues in Venezuela, which may result in the oil delivery interruptions, probably supported the growth of the prices. Reports of the oil extraction suspension in the largest fields of Libya, the Sharara field, affected traders and investors as well. The Crude Oil Inventories in the USA are steadily decreasing and it probably means that there is some kind of balance on the market. If this dynamics continues, the outlook for the oil will be “bullish”, taking into account the decrease of the oil extraction by Russia and the OPEC countries. The Afghanistan strategy, presented by Donald Trump, the US president, was due in no small part to that. The strategy implied that the American soldiers would stay in the country, but at the same time Trump promised to implement a heavy-handed and pragmatic approach to support the government in Kabul. In the wake of the above-said, one may assume that market players, traders and investors snatched at every opportunity to benefit from the oil process increase.

Also, we may assume that the OPEC’s comments about the oil extraction suspension due to the excessive supply on the market are not taken seriously. And the fulfillment of obligations relating to the oil production decrease by the members of the organization leaves a lot to be desired. However, in the short-term it might serve as a deterrent. In the long-term, the oil market will reduce under the influence of progressing technologies and less expensive energy resources.

Author: Dmitri Gurkovskiy, senior analyst at RoboForex.

Crude Oil: A Crouching Panther
 
Crude Oil: A Crouching Panther

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

 
Are you sure you want to delete this chart?
 
Write your thoughts here
 
Replace the attached chart with a new chart ?
Post
Post also to:
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post 1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email