Usually, I prefer simplest charts but oil is pretty complicated to be simplified. As you could see there are few confirmations of 0.5 and 0.61 fib levels and in the recent period we had this confirmation at around $71/b then significant drop to $40/b level. The uptrend channel is confirmed three times and now I believe we could see $45/b again and then if penetrate the channel. The current situation is showing that oil price is hanging around its YPP and it has confirmed the inability to penetrate 100 MA. That means we are more likely to see S1($41) level soon and probably S2($33) and highly unlikely S3 which is $20/b.
Some pros and cons supporting short :
Pros:
- Demand and supply show that oil market is flooded with oil.
- USA produce right now lot more than any ME country and fracking is having its second boom.
Cons:
- the situation in ME is heating again especially with US troops withdraw from Syria. Although, even the recent attacks on Saudi Arabia and Iranian tanker were not enough to push it higher.
- if the frackers in US started to bankrupt this might provide additional room for demand.
Some pros and cons supporting short :
Pros:
- Demand and supply show that oil market is flooded with oil.
- USA produce right now lot more than any ME country and fracking is having its second boom.
Cons:
- the situation in ME is heating again especially with US troops withdraw from Syria. Although, even the recent attacks on Saudi Arabia and Iranian tanker were not enough to push it higher.
- if the frackers in US started to bankrupt this might provide additional room for demand.