Commodity Today

Crude Oil - Don't Be Too Optimistic

February 16, 2015

Crude oil closed at $52.69 last Friday, the highest close this year. Market's tune turned quite positive as the oil price ran up. Other news such as rig reduction, Greece debt negotiation, Russia cease-fire agreement, etc all gave a positive push of oil price.

But I am not so optimistic. The fundamental of demand and supply is still not indicating any sustainable rally. See its 1-month daily chart below:

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The oil price actually pulled back from $53.50 high last Friday and recent trend is with lower highs: $54.50 -> $54.00 -> $53.50.

Of course the difference is very small and not meaningful.

But oil price does have a strong resistance at $54.00 level.

If it breaks out Tuesday, the most it can go is $60.00 and I doubt a break out is making now.

Therefore my prediction for the week: oil price will still be in $48 - $54 trading range and will be looking for break out next month.

Disclosure:

As of this writing, the author is long on SCO and RUSS.

 

 


   
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