U.S. West Texas Intermediate crude oil futures are trading slightly higher early Friday as traders attempt to claw back this week’s low. It’s been a volatile week with prices hitting their lowest level since February 25 only seven sessions after reaching an eight-year high on March 7. After making that move, prices have consolidated, which suggests traders may try to take another run at multi-year highs.
Fundamentally, the market remains well-supported by worries over both supply and demand. If the rally resumes, traders have to be prepared for a steady grind to the upside with the war premium created by speculative buyers essentially erased over the past two weeks.
Technically, the bearish closing price reversal top formed during the week-ending March 11 remains intact. Price-wise, the market reached the chart-pattern’s 50% - 61.8% objective last week at $92.20. Time-wise, however, we may see another 1 to 2 weeks for consolidation before traders make their next move.
The mixture of the fundamentals and technicals suggests that professionals are either accumulating futures contracts for the next rally, or distributing ahead of the next round of selling pressure.
War Premium Wiped Out But Weekly Uptrend Intact
Prices fell earlier in the week to their lowest level since February 25 on follow-through selling related to the previous week’s bearish chart pattern. The catalyst behind the move was directly related to peace talks…