September 12, 2020 at 4:46 pm #134278
During the Pandemic, the benchmark for the price of West Texas Intermediate (WTI) oil went as low negative $40. There were huge supplies all across the Oil exporting countries while low or no demand for crude oil across the countries due to Pandemic. Most countries experienced a total lockdown, making various organisations to shut down across the globe.To get more news about WikiFX, you can visit wikifx official website.
Normalcy began to return after many countries reached the peak of the virus as the day to day business activities resumed gradually, which reflected in the rise of Crude Oil. It took just a month for the price of WTI Oil to return to $35 from the negative prices..
Indication showed in April that price of Crude Oil gapped up from the negative region to $12.43. Price of Crude Oil is yet to retrace, leaving a lot of uncertainties in the future price of Crude Oil. The Daily Chart shows price is in a range. Price of Crude Oil has shown a high level of stability for the past few weeks. RSI indicates that the price was overbought at $37 in June. WTI Oil price has failed to dip despite increasing cases of the Corona-virus in some countries. The World Health Organisation (WHO) is yet to find a vaccine for the virus, most economies that were on lockdown are yet to resume a 2nd lockdown despite experts warned of a second wave.
There has been a low demand of oil across the nations of the world since the virus is seen as a hindrance. Industries that are majorly affected are the airline, shipment agencies, which is majorly the transportation sector of economies of the world. Oil is a major component for transportation. If more countries resume a lockdown, this might make the price of Crude oil to tank. The first dip in April lasted for a short period.
As the Crude oil price is currently in the upper region of the Bollinger bands on the weekly Chart, RSI shows price has repeatedly reached the over-sold regions twice in less than two years. The current price of crude Oil is at $43.39. Price has failed to reach the next psychological level of $44. The current squeeze in price might lead to a high volatility soon; it either to the upside or the downside. In the last two weeks, the resistance level stands at $43.86 and the support level stands at $41.52.
Until the pandemic becomes history, price of crude oil might not break the psychological level at $50. The oil exporting countries will need to see the oil price go greener before debts owed can be paid. Also, the 4hr chart showed on the RSI that price has been overbought. Could this be the beginning of a major bearish move or a continued bullish movement？ Nevertheless, the Ichimoku has shown a bullish future.
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