WTI Crude Oil Supplies in Threat, Is this the Start of a New Bullish Trend?
Dave Green • 1 min read
Today, we are having a very thin volatility in the absence of any major economic event. The lack of volatility is an enemy of a technical trader as it spoils the perfect trade setups. The market moves towards our target but due to less volatility, it reverses back before reaching our target levels.
This scenarios applied to our WTI Crude oil trade today since the suggested trade in WTI Crude Oil hit 30 pips. Well, it's a part of the game. I entered a sell position on the breakage of a strong support level at $53.05 with a take profit of 52.80 and stop-loss at $53.30. The leading indicator, RSI, was in support below 50 and EMA was providing a resistance as well. However, we remained unable to milk green pips out of it.
Later, I noticed that the bullish reversal was also caused by the IEA (International Energy Agency). They said that the global oil supply may struggle to match demand after the year 2020. Their reports are always very complicated to understand, but let me share a really quick insight on what they mean to say. As per the IEA, the Oil demand will expand over the preceding five years, converging to the 100 million level in 2019 and 104 million bpd by the year 2022. Most of the demand will be entirely driven by emerging economies.
The OPEC's intentions, mentioned in our previous article "Is it time to Sell WTI Crude Oil?", are to try and cut output to support the falling prices. So, it seems quite obvious that in 2020 we may see Crude Oil prices touching the sky.
In addition, for further clues about the trend, we need to keep our focus on the Crude Oil inventories that are released on Wednesday.