Crude Oil prices
Crude oil price surged in 2021 on the back of stronger than expected economic recovery and unmatching supply. The boom for commodities seen in the first months of the year led to a rise in the price of copper or corn, among others. Tight supplies led to the price of oil recovering from the negative levels seen in 2020 to over $64, fueling expectations of higher inflation in the months ahead.
Yet, there is room for more advance. On March 4th, OPEC announced that it would extend its production cuts all the way to April. This was a move that took the markets by surprise and gave the price of crude oil another boost higher.
Moreover, over the weekend, an attack from Yemen on three major oil terminals in Saudi Arabia sent the prices of oil even higher. The fear is that any disruptions in the supply of crude oil in an already stretched market will lead to a more dramatic increase in prices.
However, the move higher in the price of oil seems to encounter some technical difficulties. A bearish divergence with the RSI formed since the price broke above $60 for the first time in February of this year. Bears may want to remain short with a move to $60, where they may want to book half of the profits and trail the stop for more. On the flip side, a move above the highs would invalidate the bearish divergence.
