Crude Oil, 240 min

On May 5^th I wrote about wildfires in Canada’s oil producing regions and about US oil production dropping to lowest level since Sept 2014, sinking by more than 100k barrels a day in the week up to April 29th. Based on the fundamentals suggesting less supply and technicals indicating that the prices could move higher I said that I’d be interested in long entry signals inside my buy area at $43.20 – $44.00 with Target 1 at $45.00 – $45.50 and Target 2 at $46 – $46.70.

Crude oil retraced to my buy area on Friday, gave a buy signal and hit target 1 on the same day. Now price has rallied further and has almost touched the target 2. According to Reuters oil producers and refiners braced today for further supply constraints from the wildfires that have shut one half of Canada’s vast oil sands capacity and forced BP and other big oil firms to warn they would not be able to deliver on some contracts.

Price is currently trading near the upper daily Bollinger Bands and the recent highs. Therefore resistance levels of the recent trading range are near but at the same time the price of oil has created two higher reaction lows in the 4h chart. The higher lows increase the probabilities of this market breaking higher.

Janne Muta

Chief Market Analyst

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Crude Oil, 240 min

Crude oil rallied over 4% after reversing at 43.22 in yesterday’s trading. Recent news article from Reuters associates the move higher with a huge wildfire in Canada’s oil sands area while fighting in Libya threatens the North African output. Traders said that WTI prices were driven up by uncontrolled wildfires in Canada that disrupted oil production in the province of Alberta. This morning Kuwait News Agency reports that US oil production drops to lowest level since Sept 2014, sinking by more than 100k barrels a day in the week up to April 29^th.

Last three month’s rally has taken the price of crude oil (US Oil) to levels it tried to find support in January – March 2015 period. Price has trended higher strongly in the daily timeframe with some lack of momentum creeping in lately. However, as long as price trends higher it makes sense to look for opportunities in the direction of the trend. Yesterday’s trading created a narrow range candle which at a support indicates that prices are likely to move higher but there’s another narrow range candle (a Doji) created on April 29^th which could mean prices are likely to range a while before it’s able to break into new highs.

Should the market create a range it could trace back to the recent lows. I’m therefore looking for long entry signals inside my Buy Area at $43.20 – $44.00 with Target 1 at $45.00 – $45.50 and Target 2 at $46 – $46.70. The area between $45.20 and $46.20 could be a challenge for the bulls and therefore cause intra-day volatility. However the trend is higher in the daily timeframe and should support the buyers’ efforts in the long run. This means that those looking for swing trades might want to look for moves to a Target 3 in $50 – $51 range.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.