dusk before the dawnI think we head remarkably lower before we break out of this long-term downtrend. The triangle will be breached eventually, but I believe the $35 target level may be in order this year before moving higher again. What will they use as an excuse for such a scourge? "Saudi/OPEC turns on the taps to fight US Shale oil market share?"
UWT
Oil Playbook ( 2021 )Prices for Crude Oil are down -20% from last year which means the bearish outlook is priced in. The bearish outlook is that the -16% drop in consumption outweighs the -7% drop in production plus the 4% increase in inventory stockpiles. Bulls want to know if demand has bottomed or not and since consumption tends to be highest in Jan-Feb, it might have further to fall since travel is still lagging. However, exports have recovered and circling back, the -20% discount in crude prices indicate the market is fundamentally balanced given the uncertainty.
Production
2019 Average: 12,197
2020 Average: 11,318
%Change: -7.76%
Stockpiles
2019 Nov: 1,918
2020 Nov: 2,003
%Change: +4.24%
Consumption
2019 Average: 1,070
2020 Average: 916
%Change: -16.81%
Exports
2019 Average: 8,471
2020 Average: 8,407
%Change: -0.76%
Trading Strategy
Swings in the dollar index are primarily moving prices so this will create the trading opportunities in the near term. Get ready.
There is a momentum divergence on the DXY daily chart and the RSI has some room to run.
Crude prices have reached a resistance level.
If the Dollar index does start to rally then crude prices are going to waterfall. Best to wait for a decisive candle closing below the 10 day EMA before making a short trade.
Trading is risky. Don't do it.
Long oil/gas producer equities
KMI, LUKOY, EQT
Crude Oil - Technicals AloneThere's too much noise. Covid lockdowns, vaccine hopes, China trade retaliation, etc.
Technicals:
There was a break out of the wedge that most traders have drawn out however, I think it's more likely price breaks back down in order to build momentum for the next move higher. Ideally, there could be some good buying opportunities around the 200 EMA on the 4hr chart.
If I'm wrong then I'd like price to break above the previous high, $41.63, before I start buying.
Crude Oil - Roni BaloniOil likely to remain range bound until the Covid situation is clear. All eyes on New York. www.worldometers.info
$40 is the top of the range. Somewhere between $28 and $35 is the bottom. Waiting for a bounce to start buying dips and then taking profits near the top of the range.
Roni Baloni:
If things aren't as bad as they seem and a daily candle closes above $40.50 I'll look to buy. Longer term target is $62.50
Roni Apocalypse:
If there is a complete meltdown and a daily candle close below $28 target is then $10.50
Crude Oil - Wait for it...+$40 seems imminent however, a pulback and some chop in a range is likely. Buying dips looks to be the best strategy. $28 floor.
Alternatively, if there is a daily candle close above $40.50ish that might be good enough for me to start buying and ride the coat tails of a short squeeze.
Supply shock / weak dollar/ technicalsThere’s a huge supply scare approaching our shores, but I think it’s priced in at this point. We got the news March 8th and the markets made there moves. Shutdowns were announced a week later and market dipped lower. We are now talking about reopening... Plus a weakening dollar. Oil industries reducing capex across board. This is all adding up to be a slow accumulation opportunity for big money.
10 dollar swings at 20 year lows I'm seeing 10 dollar jumps in oil off this trendline- Clearly it's volatile and scary to trade right now. The media is scaring everyone shitless with no where to hide, but we have a bottom coming. I'm not sure we will touch the lower trendline, but if we do expect another 10 dollar pop, if not higher. Resistance is at 40 and I expect to see reached whenever equities catch a breath.