Despite the fact that we are still witnessing a great deal of choppy activity, the West Texas Intermediate Crude Oil market managed to post a slight gain during Thursday’s trading session. We are currently in a significant consolidation area, with the $82.50 level providing a major selling opportunity. Naturally, the 200-Day Exponential Moving Average is beginning a race towards that area as we speak. The level of $72.50 serves as support for the market, and I believe it will continue to do so for the time being.
In addition, there is a good chance that the market will experience a great deal of volatility as we try to determine whether or not there will be sufficient momentum to break out of this box, as well as whether or not there will be sufficient industrial demand to drive prices higher. Both of these questions are intertwined with one another.
It seems more likely than not that we are going to enter a recession, and as a result, this helps to keep a bit of a lid on crude oil prices. It is important to highlight that West Texas Intermediate (WTI) is the grade most commonly used in the United States, and there is a need to replenish the Strategic Petroleum Reserve. My guess is that we are going to keep hanging out in the same noisy neighborhood.
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An In-Depth Technical Analysis of Brent Crude Oil
The Brent markets have risen once more during the trading session on Thursday, as we have seen the $80 level offer support once again. As a result, I believe that we have a situation in which we will continue to see more chop than anything else, and Brent will of course continue to look at the overall situation when it comes to demand and of course supply.
The Organization of the Petroleum Exporting Countries (OPEC) is still being asked questions about increasing production, and to tell you the truth, as they see the world right now, they have to wonder whether or not the production cut of 2 million barrels was beneficial. After all, we are roughly in the same position as we were before they made that announcement, and demand simply has not increased.
China is restarting its economy, which should be beneficial to Brent in principle, but the company just doesn’t appear to want to get off the ground yet. Because the market is likely to continue to experience a lot of uninspiring range bound trading for the foreseeable future, traders will continue to employ indicators such as the stochastic oscillator to get an indication of whether the market is overbought or oversold until something fundamental changes.
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This article was originally posted on FX Empire.
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