Crude Traders in a Buying Mood on “Black Friday”
?? Fundamentals
Some Crude Oil traders were in a buying mood on “Black Friday” despite a ceasefire now in place between Israel and Hamas in Gaza. It appears that market participants may be focusing on outside fundamentals like a weaker U.S.
Dollar and a move towards re-establishing “risk” trades, such as long positions in commodities that could be buoying Crude Oil prices. A moderately bullish EIA Energy Stocks report on Wednesday appeared to have also influenced the bullish bias to end the holiday-shortened week.
Though U.S. Crude Inventories are over 42 million barrels above the 5-year average, Crude product inventories, especially Distillates, are becoming increasingly tight. This likely should be reflected in increased refining output, as refineries take advantage of attractive profit margins, which would entail higher demand for Oil in the coming months.
?? Technical Notes
Looking at the daily chart for January Crude Oil, we notice what appears to be a “rounded-bottom” pattern being formed. It would take a close above the recent high of 89.80 to confirm this technical pattern.
Prices are now trading above the 20-day moving average (“MA”), though the longer-term 200-day MA is still more than $7 higher. The 14-day RSI is neutral, with a current reading of 51.15. The November 19th high of 89.80 is the next resistance level for January Crude, with support found at 84.53.
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