• 3 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 7 minutes Saudi and UAE pressure to get US support for Oil quotas is reportedly on..
  • 11 minutes China devalues currency to lower prices to address new tariffs. But doesn't help. Here is why. . . .
  • 15 minutes What is your current outlook as a day trader for WTI
  • 1 hour In The Bright Of New Administration Rules: Immigrants as Economic Contributors
  • 4 hours Will Uncle Sam Step Up and Cut Production
  • 17 mins Long Range Attack On Saudi Oil Field Ends War On Yemen
  • 10 hours Domino Effect: Rashida Tlaib Rejects Israel's Offer For 'Humanitarian' Visit To West Bank
  • 10 hours Gretta Thunbergs zero carbon voyage carbon foot print of carbon fibre manufacture
  • 2 hours * 8 to 10 "good" years left in oil industry * UAE model for Economic Deversification * Others spent oil billions on terrorism, wars, lopping off heads * Too late now
  • 4 hours CLIMATE PANIC! ELEVENTY!!! "250,000 people die a year due to the climate crisis"
  • 10 hours Continental Resource's Hamm wants shale to cut production. . . He can't compete with peers.
  • 15 hours NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 24 hours Significant: Boeing Delays Delivery Of Ultra-Long-Range Version Of 777X
  • 1 day Strait Of Hormuz As a Breakpoint: Germany Not Taking Part In U.S. Naval Mission
  • 23 hours Why Oil is Falling (including conspiracy theories and other fun stuff)
  • 14 hours Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
  • 5 hours US Petroleum Demand Strongest Since 2007
Alt Text

Oil Rises As Market Awaits Saudi Move Counter Glut

Despite another gloomy demand forecast…

Alt Text

Here’s Why Canadian Oil Prices Are Finally Rallying

Canadian pipeline companies are looking…

Alt Text

Oil Crashes On New Trade War Escalation

Oil prices opened the week…

FX Empire

FX Empire

More Info

Premium Content

Crude Oil Market Analysis for the Week of March 12, 2012

May Crude Oil futures posted a modest gain last week with better-than-expected U.S. economic news the catalyst behind the move. The market started out weak as follow-through selling fueled by the previous week’s technical closing price reversal top attracted some mild selling pressure.

By Wednesday the market had reached its low for the week after a weekly inventories report showed a smaller-than-expected increase. The Energy Information Administration said oil supplies increased by 800,000 barrels in the week ended March 2. This was below pre-report analyst estimates calling for an increase of 2 million barrels.

Also giving the market a boost last week was the better-than-expected U.S. Non-Farm Payrolls report. Traders reacted to the good news by driving up prices on Friday. This was in anticipation of greater demand due to expectations of a stronger economy. Although demand is still sluggish, an improving economy could be a positive influence on this key side of the fundamental equation.

Geopolitical events took a backseat to traditional fundamentals last week although President Obama reiterated his stance that a military strike against Iran by U.S. forces is still an option but only if provoked by the renegade nation. Negotiations between Europe and Iran also continued in an effort to ease tensions caused by Iran’s move to cut sales of crude oil to certain European nations.

Surprisingly, crude oil was able to post a small gain despite the strength of the U.S. Dollar. Typically, commodities priced in dollars fall when the Greenback rallies. Last week, however, due to the strong economic news, crude oil traders opted to ignore this correlation.

Although the market closed higher for the week, the close at $107.87 was not very impressive. Based on the short-term break from $110.95 to $104.88, the market settled below a minor retracement zone at $107.92 to $108.63. The rally to this level was most likely short-covering triggered by short-term oversold conditions.

The close below the retracement zone also corresponds with a close below an uptrending Gann angle that had held as support for 4 weeks. This set-up indicates tentativeness among traders. The lofty price level that crude oil is trading at could also be a factor discouraging traders from going long.

Two weeks ago May crude oil posted a potentially bearish closing price reversal top. The follow-through last week confirmed the pattern, but sellers still shied away from pressing the market. Now that crude has retraced at least 50 percent of the break, it is possible that sellers will return this week. Although past performance is no guarantee of futures results, the closing price reversal pattern is very reliable at producing 2 to 3 week breaks equal to at least 50 percent of the previous rally. If this pattern is controlling the market at this time, then traders can expect a correction to at least $103.61 by the end of next week.

Last week’s trading range was tight so traders should look for a little expansion this week. Downside pressure could control the trade if $108.63 can’t be penetrated on the upside. However, traders shouldn’t look for much downside movement until $104.88 fails as support. Gains may be limited by a stronger U.S. Dollar.

Factors Affecting Crude Oil This Week:

Geopolitical Events:  Iran is still a wildcard. President Obama’s comments two-weeks ago regarding military action seems to have had an effect on speculators who have chosen to pare positions while waiting for further developments.

U.S. Economy:  Last week’s friendly U.S. Non-Farm Payrolls report has some convinced that the economy has turned a corner so anticipation may be building that this news will in some way show up in the supply/demand reports.

Supply and Demand:  Demand remains sluggish. Traders will continue to watch events in the Middle East and the strength of the U.S. economy for clues. Uncertainty and possible disruptions in supply will drive up prices.

FXEmpire.com is the Forex flagship site of the FX Empire Network. The FX Empire Network provides readers with the most expert and most timely technical analyses, fundamental analyses and news-pieces; this in order to empower them to make for themselves the best possible financial decisions.
FXEmpire.com is updated daily with video based Technical Analyses, text based Fundamental Analyses and news-pieces. Our readers receive a review of the past week’s market activity coupled with an outlook for the upcoming week and regular market updates.




Download The Free Oilprice App Today

Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play