OIL MARKET REMAINS FLAT WITH CAUTIOUS INVESTORS

Despite the Organization of the Petroleum Exporting Countries and Russia, lately known as OPEC+, agreeing to proceed with further output cuts, the market has kept in a flat note. The investors have remained cautious over the market sentiment expecting new clues from today’s meeting second episode. Before moving forward, let us go through the technical side as usual.

Technically speaking, price action has remained trending within an uprising channel since October, fighting all market adversities respecting the channel support and resistance trendlines. A stronger bullish bias is still forming wherein the presence of a flat 200SMA and 18/50 EMA steady sloping up. However, MACD is signaling a buying opportunity in confluence with a Stochastic indicator showing buying intention not yet overbought. Yesterday’s sentiment in the market represented by a Doji / bearish pin bar kind of candlestick shows the indecision driven by caution traders.

Important to bear in mind that we are in the presence of different factors or variables that, under proper alignment, they could create the perfect confluence that most probably would push the black gold to new handles last seen in the first quarter of this year. 

On one hand, the trade deal uncertainties bringing the sentiment dominated by the odds in supply outage over demand depletion, OPEC+ looking for alliances and support for non-members to agree and fully commit to the proposed deal on the production cut in small doses until reaching target, and last but not least winter season for the northern hemisphere been the only factor not driven by human interference. Definitely, more clarity in the trade war altogether with a full commitment from non-members of the energy cartel could bring the commodity market to move to the triangle zone drew in the above chart and even beyond. 

I want to finish this weekly report with a well-known quote that says: “ The oil market is especially sensitive even to a hint of expansion or contraction in supply.” Happy weekend ahead, and be the market stay with us.