The Downward Trajectory: Understanding Weak Oil Market Dynamics
Oil looks weak. It seems extremely weak, mainly because production hasn't come down. Chinese demand is still low and might never reach its ATHs, but this, along with the US refilling its SPR, can potentially send higher oil prices.
However, this is unlikely to happen before the market takes out this quadruple bottom. Until all the lows are swept, and potentially until the market trades at 43-55$, it's unlikely to see oil go up. Only those prices will make OPEC+ cut production and have 80+ as its target. Until many of these member countries feel pain, it's unlikely that oil will trade above 80$ without some other geopolitical shock.
Again, oil can trade higher, but for now, the target is 60.6$, and potentially 54.2$ is next. We can look for potential longs toward 85-100$.
However, this is unlikely to happen before the market takes out this quadruple bottom. Until all the lows are swept, and potentially until the market trades at 43-55$, it's unlikely to see oil go up. Only those prices will make OPEC+ cut production and have 80+ as its target. Until many of these member countries feel pain, it's unlikely that oil will trade above 80$ without some other geopolitical shock.
Again, oil can trade higher, but for now, the target is 60.6$, and potentially 54.2$ is next. We can look for potential longs toward 85-100$.
Comment:
The trade is still on, but it isn't unreasonable to cut it or place the stop loss lower.
The fact that all the OPEC+ announcements haven't moved the market yet is quite interesting. Demand is weakening, but supply could have many more issues in the not-so-distant future.