WTI Crude Oil
The West Texas Intermediate Crude Oil market has initially tried to rally during the trading session on Tuesday but gave back the gains to show a little bit of hesitation. After all, OPEC is in the midst of the meeting where they had to extend it due to a bit of discourse amongst members. While there is more than likely going to be an extension of production cuts, the question is more along the lines of how long and how much and whether or not it happens. With this, it is likely that we pull back towards the $43 level again, which should see significant support based upon “market memory.” Longer-term, the $50 level above has to be seen as a major ceiling.
Crude Oil Video 02.12.20
Brent markets of course did very much the same as the West Texas Intermediate markets did, with the $47.50 level offering a bit of support. Ultimately, the market will probably find support in that general vicinity, as we have seen buyers jump back in but the next couple of days could be a bit noisy and choppy to say the least. With that being the case, I think that a lot of value hunters are still out there looking to pick up crude oil on a pullback, as the market certainly has broken out above a significant resistance barrier.
This is all part of the “reflation trade” which probably has a little bit of legs left in a bit to think that crude oil is suddenly going to vertically spike is probably a bit of a stretch as we still have lockdowns and oversupply to worry about. However, that oversupply is nowhere near as bad as it once was.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire