short term buy on crude oil
U.S. Oil still stuck in consolidation, making big ranging moves. Monday was a federal holiday, Juneteenth. New York -Traded Texas intermediate, or WTI did not make much movement upon opening. Sunday or Monday, closing with a bearish candle at $90.87. Tuesday dropped 1% or 100 pips to 69.82 area, then regaining by the end of the day closing at 71.63
Wednesday Fed Chair J. Powell had a testimonial that continued into Thursday. This testimony comes a week after a hawkish interest rate “skip” Last week the federal Reserve was careful to word skip, and not a pause so the markets would not react in a negative way. The dollar soared, along with U.S. stock, with oil tumbling. Top investors and analysts stated the Fed wanted to appear to be hawkish in the next FED meeting so the market would not lose everything it has gained; stating they see it very unlikely the FED will continue to raise rates and believe the fed is done raising rates. The two-day testimony Powell was sure to emphasize raising of rates is not over, and he is standing strong on bringing inflation down to 2%.
A hawkish Powell has pushed oil down nearly 4% Wednesday and Thursday. Alongside a hawkish Powell the BOE raised interest rates by half a percentage point. The U.K.’s interest rate is now at 5%; the highest it has been since 2008. The BOE decided to raise rates drastically this time due to U.K. inflation will take longer than anticipated to bring down. The U.K. is right behind the Federal with interest rate at 5% and the U.S. at 5.25% pausing for the first time for 10 straight FED meetings.
The U.S. Crude inventory was released Thursday. The forecast for the week ending on June 16 was 1.873M actual came in as -3.831M. Crude oil inventories is reported on a weekly basis for the pervious week. This report measures the number of barrels of commercial oil held by U.S. firms, reported by the EIA (Energy Information Administration. Last week inventories fell greater than expected implying Oil demand is greater which is bullish for oil. It is typical for oil demand to be greater this time of year with summer travel. Wednesday marked the first day of the summer. The report caused oil to spike just a little, as other economical news overweighed the bullish report. Crude oil moves against the dollar, with hawkish news for the dollar it is bearish for oil.
Powell being adamant about continuing to raise rates and the BOE raising rates could slow economic growth and reduce oil demand.
Crude oil has been ranging (consolidating) in the same zone on the 4hr and daily timeframe since May 03. 2023. Oil has rejected off the demand zone two time and rejected the supply zone twice as well. Only the daily a Double top can be seen forming. Oil would need to break and close below the neckline for the double top to confirm a continued sell down. If neckline is broken and closes below oil can go to pervious rejected low of $65.50 and 63.96. The Fib retracement was used to confirm retracement levels of potential TP areas.
If oil rejects at the neckline, it is possible the range will continue you. If it rejects the neckline a potential buy with retracement/reversal key areas being $72.71 and $74.20. Crude oil would need to break and close above $74.95 for a confirmation for a long term buy.
Wednesday Fed Chair J. Powell had a testimonial that continued into Thursday. This testimony comes a week after a hawkish interest rate “skip” Last week the federal Reserve was careful to word skip, and not a pause so the markets would not react in a negative way. The dollar soared, along with U.S. stock, with oil tumbling. Top investors and analysts stated the Fed wanted to appear to be hawkish in the next FED meeting so the market would not lose everything it has gained; stating they see it very unlikely the FED will continue to raise rates and believe the fed is done raising rates. The two-day testimony Powell was sure to emphasize raising of rates is not over, and he is standing strong on bringing inflation down to 2%.
A hawkish Powell has pushed oil down nearly 4% Wednesday and Thursday. Alongside a hawkish Powell the BOE raised interest rates by half a percentage point. The U.K.’s interest rate is now at 5%; the highest it has been since 2008. The BOE decided to raise rates drastically this time due to U.K. inflation will take longer than anticipated to bring down. The U.K. is right behind the Federal with interest rate at 5% and the U.S. at 5.25% pausing for the first time for 10 straight FED meetings.
The U.S. Crude inventory was released Thursday. The forecast for the week ending on June 16 was 1.873M actual came in as -3.831M. Crude oil inventories is reported on a weekly basis for the pervious week. This report measures the number of barrels of commercial oil held by U.S. firms, reported by the EIA (Energy Information Administration. Last week inventories fell greater than expected implying Oil demand is greater which is bullish for oil. It is typical for oil demand to be greater this time of year with summer travel. Wednesday marked the first day of the summer. The report caused oil to spike just a little, as other economical news overweighed the bullish report. Crude oil moves against the dollar, with hawkish news for the dollar it is bearish for oil.
Powell being adamant about continuing to raise rates and the BOE raising rates could slow economic growth and reduce oil demand.
Crude oil has been ranging (consolidating) in the same zone on the 4hr and daily timeframe since May 03. 2023. Oil has rejected off the demand zone two time and rejected the supply zone twice as well. Only the daily a Double top can be seen forming. Oil would need to break and close below the neckline for the double top to confirm a continued sell down. If neckline is broken and closes below oil can go to pervious rejected low of $65.50 and 63.96. The Fib retracement was used to confirm retracement levels of potential TP areas.
If oil rejects at the neckline, it is possible the range will continue you. If it rejects the neckline a potential buy with retracement/reversal key areas being $72.71 and $74.20. Crude oil would need to break and close above $74.95 for a confirmation for a long term buy.
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