MAs Keep Crude Oil Supported, Pushing it Towards $62

Crude Oil has moved above the 20 and 50 SMAs again and they are pushing the price higher, keeping Oil bullish

Skerdian Meta•Monday, December 30, 2019•1 min read

Crude Oil has been bullish since the beginning of October. The sentiment improved in financial markets after comments for a partial trade deal between US and China, and risk assets such as crude Oil and stock markets turned bullish. Since then, the pressure has been on the upside.

During the previous two months, we have seen some decent pullbacks lower, with the last occasion after Russia’s energy Minister Novak suggested that OPEC+ delayed the new crude production cuts until the middle of next year. WTI crude lost around $5, retreating from below $60 to $55.

But, OPEC+ went ahead and cut production by an additional 50k barrels/day and US WTI crude broke above $60. Buyers have been in total control, as the H1 chart above shows. Smaller period MAs such as the 20 SMA (green) and particularly the 50 SMA (yellow) have been providing support during pullbacks lower and pushing the price higher.

The 200 SMA (purple) came into play before Christmas break. Traders unloaded some of their buy positions before Christmas just in case, but buyers came back again at $60, which seems to have turned into support now. The smaller MAs came back into play and today WTI crude found support at the 50 SMA (yellow) again. So, buyers remain in total control here and the $62 level looks to be in danger now.

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.