Crude Oil Stumbles but Still Up 11% on the Week

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Written By: Kevin George
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    Summary:
  • Oil prices were up 0.25% on Thursday despite giving up gains into yesterday's close. Black gold almost hit $43.00 but pulled back to close at $41.50.

Oil prices were up 0.25% on Thursday after giving up gains above $42.00 into yesterday’s close. Black gold almost hit $43.00 yesterday but pulled back to close at $41.50. This is still an 11% gain for the commodity this week after news of a potential coronavirus vaccine lifted demand hopes.

On the supply side, the news also boosted the chances of OPEC holding off on a planned supply increase scheduled for January. Algeria’s energy minister suggested on Wednesday that the group could extend existing production cuts of 7.7 million barrels per day (bpd) further into next year.

Oil had been under pressure after a second wave of the coronavirus led to new lockdowns in Europe and if Joe Biden was to become President of the United States, he has already stated the need for a lockdown, which advisers have said should be 4-6 weeks in duration. Crude needs to see an end to the lockdown stratgey in order for global demand to return.

Oil had been boosted by crude inventory data which saw a drop in U.S. oil stocks of 5.1 million barrels. This follows an 8 million reduction in the previous week. Gasoline and distillate stocks were also lower, by 3.3 million and 5.6 million barrels respectively.

Crude Oil Technical Outlook

Crude oil rallied to near $43.00 yesterday before giving up all of those gains to close near $41.50. This is a bearish bar so some caution is needed for long positions. The uptrend should still be intact after this week’s price move but a correction is possible to test support at $40.00. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching

Crude Oil Daily Chart

Written By: Kevin George

Kevin George has over twelve years' experience in financial markets trading, which included stints in London and New York, trading equities and currencies. He has also traded in commodities, equities, futures and options. He has extensive technical-experience and combines this with a fundamental overview. He has published for SeekingAlpha, where he runs his own subscriber newsletter and graduated with an MSc in finance in 2017.

Published by
Written By: Kevin George