Oil prices swung wildly into the positive territory yesterday. The rally eventually came to a halt around the $50 handle for Brent and $48 for WTI, and both contracts have been trending lower from these levels until an hour or so ago.
The longer term recovery for oil which peaked in the $52 per barrel area last month, is now reversing once more and picking up bearish momentum ahead of the weekly oil inventories due for release later today, as both the technical and fundamental picture help to drive prices lower once again.
The word that comes to mind to describe the price action on the daily WTI oil chart is ‘stately’ with crude oil continuing to move higher in a series of small rallies then punctuated with a pause point and further consolidation.
For oil prices, the new year could hardly be described as happy, as the relentless decline in prices continues, with December’s pause now starting to fracture, as February’s WTI contract picks up downside momentum.
For oil traders and speculators the summer months continue to deliver stellar trading opportunities, and whilst equity investors are wringing their hands, the WTI contract shows no signs of wanting to reverse just yet.
As speculative commodity traders, there are few occasions when it is hard not to make money, and certainly at present we have several stand out opportunities. These opportunities are rare, but when they occur, it’s time, as they say to ‘fill your boots’.
Last week was an interesting one for oil traders, with the rally of Monday promising much, only for this move to be snuffed out during the remainder of the week, as the WTI Light Sweet Crude (USO, quote) contract for January closed close to the open at $65.84 per barrel.
For oil traders and speculators hitting the sell button has become almost automatic, as the heavily bearish tone for the commodity shows no signs of abating just yet, with another solid move lower yesterday offering low risk trading opportunities once again.
It was a day of muted trading for oil yesterday, with both the US and Canada observing a public holiday in honor of their war veterans, and as a result the Wednesday oil inventories report is now scheduled for Thursday.
For longer term oil traders it’s been a question of being patient and waiting, as the commodity continued to consolidate in a narrow trading range, following the extended move lower of early October, which saw the price of oil break through the floor of potential resistance in the $88 per barrel region, before moving down to consolidate in the $79 to $83 per barrel region, where it has remained since.
