Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective.

On Monday, crude oil moved lower and lost almost 2%. Thanks to this drop black gold tested the late January lows, but there was no daily closure below them, which means that the very short-term outlook remains mixed.

Earlier today, oil bulls used this fact and pushed the price of light crude higher.

What’s interesting, the sell signals generated by the indicators remain in place, which together with sizable volume, which accompanied recent declines suggests further deterioration. However, in our opinion, such price action will be more likely and reliable only if upcoming crude oil inventories reports show bearish numbers or crude oil production increases above the barrier of 10 million barrels per day.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager

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