Oil Prices continue to Surge after EIA report confirms shrinking supply

WTI US Crude Oil Outlook:

  • Oil prices push higher amid reports of shrinking supply
  • US Dollar weakness continues to support higher prices, coupled with rising demand
  • Vaccine rollouts remain a key catalyst for short-term price action

{{AD}

US Crude oil prices have continued to surge after declining stockpiles provided bulls the opportunity to break through resistance, formed by key Fibonacci levels of recent major moves.

Visit the DailyFX Educational Center to discover why news events are Key to Forex Fundamental Analysis

After recovering to pre-pandemic levels, bullish momentum temporarily stalled at 6064.2, (the 38.2% Fibonacci retracement level of the historical move) pushing price action into a tight range, between the confines of symmetrical triangle.

However, the release of both the API (American Petroleum Institute) and EIA (Energy Information Administration) reports have supported Oil’s bullish narrative, allowing buyers to regain dominance over short-term price action.

Oil Forecast

Recommended by Tammy Da Costa

Get Your Free Oil Forecast

WTI Technical Analysis

With US Crude Oil prices currently trading above both the 8 and 34-period EMA on the daily and monthly chart, the Commodity Channel Index (CCI) continues to linger into overbought territory.

Meanwhile,a MACD crossover below the zero line indicates that bullish momentum may continue to gain traction, which could see WTI Crude Oil testing the next level of resistance, currently residing at the key psychological level of 6500.

Understanding the Core Fundamentals of Oil Trading

Understanding the Core Fundamentals of Oil Trading

Recommended by Tammy Da Costa

Learn the Core Fundamentals of Oil Trading

WTI – US Crude Oil Monthly Chart

Oil Prices continue to Surge after EIA report confirms shrinking supply

Chart prepared by Tammy Da Costa, IG

Although hopes of a swift economic recovery continue to support the demand for major commodities, the decision to pause the distribution of the Johnson and Johnson vaccine has increased concerns of further global lockdowns, forming a hinderance for further gains.

WTI – US Crude Oil Daily Chart

Oil Prices continue to Surge after EIA report confirms shrinking supply

Chart prepared by Tammy Da Costa, IG

WTI – US Crude Oil Client Sentiment

Oil Prices continue to Surge after EIA report confirms shrinking supply



of clients are net long.



of clients are net short.

Change in Longs Shorts OI
Daily -18% 17% -4%
Weekly -22% 33% -3%

At the time of writing, retail trader data shows 58.48% of traders are net-long with the ratio of traders long to short at 1.41 to 1. The number of traders net-long is 7.76% lower than yesterday and 19.17% lower from last week, while the number of traders net-short is 10.84% higher than yesterday and 27.46% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Oil – US Crude prices may continue to fall.

Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Oil – US Crude price trend may soon reverse higher despite the fact traders remain net-long.

— Written by Tammy Da Costa, Market Writer for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707


Be the first to comment

Leave a Reply

Your email address will not be published.


*