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

Although crude oil moved higher after the EIA weekly report showed that domestic crude oil production dropped by 29,000 barrels per day and crude oil inventories decreased by 0.9 million barrels, the commodity reversed and declined in the following hours, erasing almost all earlier gains. Will we see further deterioration in the coming days?

Today’s alert is once again going to be very brief, because crude oil didn’t do anything that would change the outlook yesterday and the same applies to today’s session so far. The only thing that crude oil did yesterday is that the commodity moved little higher and increased above the previously-broken blue support/resistance line, invalidating earlier breakdown. As it turned out in the following hours, this improvement was only temporary and light crude came back under the blue line, canceling almost all gains and finally closing only 0.17% above the Tuesday’s closing price. Such daily reversal is a negative sign, but the outlook wasn’t positive anyway, so nothing really changed.

Consequently, the comments that we made yesterday remain up-to-date also today and if you haven’t had the chance to read our Wednesday’s alert, we encourage you to do so today – it’s up-to-date:

Oil Trading Alert: Crude Oil – Oil Bears vs. Support Zone

As always, we’ll keep you - our subscribers - informed should anything change.

Thank you.

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

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