The Black Gold Prices Have Stabilized. A Few Trading Ideas
Aggressive sales have been observed on the oil market since the beginning of this week. Futures for the WTI crude oil fell by more than 3.5% during this period. The black gold prices have stabilized. Investors expect additional drivers.
The news background:
Id like to remind that the OPEC meeting was held last week. The current contract on reducing the oil production was extended until the end of 2018. At the same time, Nigeria and Libya joined the contracting countries. The OPEC countries and other major oil producers agreed on cutting the oil production by 1.8 million barrels per day in November. Nevertheless, the oil quotes didnt show a significant reaction, as this event was already included into the prices.
The U.S. Energy Information Administration report pointed to the oil inventories reduction by 5.6 million barrels. The market expectations were at the level of 3.4 million barrels. At the same time, the US oil production updated its historic maximum once again. The indicator increased by 25 thousand barrels per day and reached 9.7 million barrels per day. The gasoline inventories increased by 6.8 million barrels per day. Experts are afraid that such a dynamics will reduce the demand for crude oil.
The current technical pattern:
Support levels: 55.90 USD, 55.00 USD
Resistance levels: 56.40 USD, 57.00 USD, 58.00 USD
The black gold prices are consolidating now. The key levels of support and resistance are 55.90 and 56.40. The indicators signals vary. The price fixed below 50 MA and 200 MA. The MACD histogram moved to a positive zone and continues to rise. I recommend opening positions from the key levels with a trailing stop.
If the price fixes above the 56.40 mark, a correction movement may begin. The closest target for taking profit is the 57.00 mirror resistance level. The quotes can move to 58.00-58.75.
An alternative option. If the price fixes below the 55.90 support level, the black gold quotes may continue to decline. They may reach the 55.00 round level.