Crude Reversal Underway?
Following a sustained decline from early highs on the year around $121.50s, crude prices are starting to turn higher again this week. Crude future shave been moving lower in a well-defined bear channel over the correction from the summer highs. However, after stalling along support at the 85.53 level, accompanied by bullish divergence in momentum studies, crude prices are now testing above the channel top and threatening a fuller bullish reversal. Bulls can look for a break above 95.93 targeting a move up to the 103.80 level initially.
Keep an Eye On
News this week that OPEC+ might ease oil production once again, in a bid to tame the recent drop in oil prices, is helping lift sentiment here. Additionally, with gas prices soaring again over the last week, driven by fears over the Russia-EU gas supply line, demand for oil is creeping back up. If the idea of an OPEC production cut gathers traction, this should see oil prices continue firmly higher near-term. However, if we see some pushback against this idea, we can expect oil prices to soften again.