Oil unaffected by the Port of Baltimore's closure

After breaking above the ascending channel and reaching its highest value in nearly six months late last week, the price of West Texas Intermediate crude oil retested the upper bound of the channel during yesterday’s trading session. The outlook continues to look bullish on daily and weekly time frames. Nevertheless, multiple indicators flash overbought signals on the daily chart, implying this might not be the best spot to enter the market on the long side, and instead, it might be preferable to wait for a more substantial correction.

While waiting for such an event, we would like to address a recent tragedy in Baltimore that captured national headlines and caused the closure of the Port of Baltimore. Some analysts proclaimed this to be the start of bigger problems for various supply chains. However, despite the event's emotional weight and social implications, its impact on the oil market has been minimal. That is mainly because the port’s imports are not made up of crude oil but rather petroleum-derived products, including biodiesel, asphalt, and numerous fertilizers (along with different non-petroleum products). Therefore, the port does not hold considerable significance to the oil market.

Illustration 1.01
Illustration 1.01 shows the daily chart of USOIL and the upward-sloping channel.

Technical analysis
Daily time frame = Bullish
Weekly time frame = Bullish

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DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor or any other entity. Your own due diligence is highly advised before entering a trade.