On the daily chart below, we can
see that the price is still stuck in the range between the support at 72.00 and the resistance at 82.00. There’s uncertainty in
the market for what comes next and a clear battle between buyers, who are
betting on resilient global growth with Chinese demand and tight supply keeping
up prices, and sellers, who are betting on weaker demand as central banks take
their policies well into restrictive territories.
We can also see that the low was
near the $70 level as that was the price at which the US
said they will start to refill their Strategic Petroleum
Reserve (SPR). The levels are set though: get above 82.00 and the buyers will
start to target the 93.00 level, on the other hand, get below 72.00 and the
sellers will look for prices in the $60 region.
On the 4 hour chart below, we can
see more closely the current rangebound price action. The price recently
bounced once again from the support area at 72.00 and started its rally towards
the 82.00 ceiling.
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That’s the target for now and
it’s likely that we will see another rejection there. The best strategy in such
instances is to stay out of the market or to “play the range” where one can buy
at support and sell at resistance with defined risk.
On the 1 hour chart below, we can
see the recent news of Russia
intending to cut oil production by 500k BPD in March. The price spiked up, as less
supply is bullish for the black gold, but had a hard time to really kick off a
strong buying wave.
In fact, we saw a big pullback
some time after erasing all the gains. Right now, the moving
averages are pointing north and we should see the price getting to the 82.00