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Oil hit a five-year high near $84 a barrel on Thursday driven by tight supply and a global energy crunch, although prices eased as some investors took profits on signs the rally is looking overstretched.
Possible Scenarios for the market :
Scenario 1 :
a correction wave is due and it will probably start by a drop in price that will lead the Crude price back to the first located near the $80 area where the Bulls power will be tested, If the bears were able to beat the Bulls at that level then we could be seeing a further drop that will reach the $75 – $76 level.
Scenario 2 :
the global energy shortage has caused a push in oil prices recently and a solution for that problem hasn’t been found yet. So after the correction wave happen the Bulls will go in to try to push the price back up and when that happens, the market will be moving to the first resistance line located at $84.98, and in case a breakout happens from that line then a further push will happen to reach the $87.93 level
Technical indicators show :
1) The market is above the 5 10 20 50 100 and 200 MA and (Strong sign)
2) The is at 71.38 reached the overbought zone, which indicated a correction is due, with no divergences found between the market and the indicator.
3) The is moving in the overbought zone which could indicate a drop soon, With a negative crossover between %K and %D.
Fundamental point of view :
Oil prices have eased in Asia after China’s threat to cap coal prices saw the mainland coal slump limit down once again today.
That has unwound some of oil’s gains overnight after Saudi Arabia poured cold water on more OPEC+ production, oil or gas, and US official Crude Inventories, Gasoline and Distillates fell sharply, including crude stocks at the Cushing hub.
WTI jumped 1.33% to USD 83.50 overnight, testing USD 84.00 a barrel intraday. In Asia though, it has fallen 0.50% to USD 83.10 a barrel.
This is my personal opinion done with of the market price and research online from Fundamental Analysts and News for The Fundamental point of view, not financial advice.
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