Trading position (short-term; my opinion; levels for crude oil’s continuous futures contract): I’m revising the target and stop-loss as a consistent long rally seems unlikely at this point. Hold long positions with entry at $59-61 with $54.81 as a stop-loss and $65.50 as the initial price target.

There is hardly any change in the behaviour of oil from the past week. There are sudden price drops and a rise in response to news, making the black gold volatile yet rangebound. Support at $60 still continues and we are not seeing definitive movement in either direction because no one is sure about future oil demand.

Recent lockdowns in Europe, India and many other countries have increased the risk in an oil demand reduction. On the other hand, positive global economic growth of 6% for 2021 is being predicted by the IMF, which is definitely bullish news for oil. Furthermore, a weakened dollar has put upward pressure on oil prices this week.

For the coming weeks, we may see a continuation of this dilly-dallying behavior in the oil market. I see a higher likelihood of a rally, therefore, keeping a long position is still justified.

To summarize, oil stability at the $60 level continues. There is currently no consensus on future demand development and more clarity on this issue in the coming days will decide the future course.

As always, we’ll keep you, our subscribers well informed.

Trading position (short-term; my opinion; levels for crude oil’s continuous futures contract): I’m revising the target and stop-loss as a consistent long rally seems unlikely at this point. Hold long positions with entry at $59-61 with $54.81 as a stop-loss and $65.50 as the initial price target.

Thank you.

Nishant Jain, MBA, CPSM
Oil Trading Strategist