Technical Analysis OIL : 2021-03-30

IFC Markets

Master Trader
Oct 31, 2012
London (Great Britain)

Recommendation for WTI:Sell​

Sell Stop : Below 57

Stop Loss : Above 68

RSI : Sell

MACD : Sell

MA(200) : Neutral

Fractals : Neutral

Parabolic SAR : Sell

Bollinger Bands : Sell

Chart Analysis​

IFC Markets Tech Analysis

On the daily timeframe, OIL: D1 broke down the mid-term uptrend support line. A number of technical analysis indicators formed signals for a further drop. We do not exclude a bearish movement if OIL sinks below the last lower fractal: 57. This level can be used as an entry point. We can place a stop loss above the peak since October 2018, the upper Bollinger line and the Parabolic signal: 68. After opening the pending order, we can move the stop loss following the Bollinger and Parabolic signals to the next fractal maximum. Thus, we will change the potential profit/loss ratio in our favor. After the transaction, the most risk-averse traders can switch to the four-hour chart and place a stop loss order, moving it in the direction of the trend. If the price meets the stop loss (68) without activating the order (57), it is recommended to delete the order: the market sustains internal changes that were not been taken into account.

Fundamental Analysis​

In the Suez Canal, the Ever Given container ship was re-floated. Will the correction of OIL prices continue? The Ever Given accident blocked the shipping traffic, including oil tankers, on the Suez Canal for 6 days. It is estimated that this has delayed the supply of up to 10 million barrels of oil and oil products to the world market. This contributed to the growth of WTI and Brent prices. Now, with the resumption of oil supplies, the situation may change. The next most important factor to impact quotations will be the upcoming OPEC+ meeting on April 1, 2021. Cartel members may be required to determine their production levels in May. OPEC+ has not increased production in the last three months (February-April). There are no more or less reliable forecasts yet, but this time oil production may slightly increase. Note that according to U.S. Energy Information Administration (EIA), oil production in the US last week reached 11 million barrels per day (bpd). This is just 16% less than the all-time high of 13.1 million bpd that was in February 2020. Against this backdrop, US oil reserves are now 6.4% above the 5-year average.