Crude Oil Daily Forecast – Is this the Time to Buy Crude?
Crude has posted gains in the Friday session. Currently, U.S. crude oil is trading at $27.59, up $2.24 or 8.51% on the day. Brent crude oil is trading at $31.97, up $2.57 or 8.67%.
Crude Tests $20 – To Buy or Not to Buy?
We are seeing a pause in the massive sell-off of crude, which hit $20 a barrel earlier in the week. Despite this upward price retracement, traders should bear in mind that the current trend remains downward and overall sentiment is pessimistic. This means that the floor could be still lower. At the same time, oil prices have crashed and fell this week to 18-year lows, which certainly represents a buying opportunity. Traders may wish to show some caution and not go “full in” to such volatile markets, but these prices can certainly be considered a bargain.
Oil Rebounds on Trump Remarks
Crude prices have moved higher on Friday after U.S President Trump said on Thursday that he was prepared to get involved in the Saudi Arabia-Russia price war “at the appropriate time”. Trump did not offer any specifics, but investors were heartened that Trump’s remarks (warning?) could help end the price war, which has contributed to plunging oil prices. Earlier this week, U.S. crude fell as low at $20.27, its lowest level since 2002.
The U.S. is unhappy with plummeting oil prices, which has severely hurt U.S. shale oil production, which makes up 1/3 of onshore oil production in the continental U.S. Still, analysts aren’t expecting Russia or Saudi Arabia to lose face anytime soon and be the first to blink. Saudi Arabia is incensed that Russia torpedoed its move to slash production and has responded with deep price cuts and an increase in production. However, Russian President Putin is unlikely to bend to the Saudis, as long as the Russian economy is not hit too hard by falling prices.
Technical Analysis
With crude showing some sustained upward movement, a number of resistance lines have fallen. Currently, there is resistance at 29.85. If crude breaks through this line, it has room to move as high as 32.80, which is the next major resistance line. On the downside, there is support at support 26.80, followed by 24.20.
This article was originally posted on FX Empire
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