WTI crude oil prices are up today as global risk appetite returns to the markets, with S&P 500 futures and DAX index rising at the same time as crude oil prices.
Looking beyond the near-term price action in crude oil prices, the risk-reward ratio favors the bulls following a few weeks of extreme volatility.
A few weeks ago, crude oil prices rose sharply on the news of Saudi Arabia crude oil facilities been attacked, then they tumbled by an even higher magnitude. However, as the price neared, the August low of $50.50 crude oil prices found support as the prices reached oversold levels.
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The outlook for the next few days remains positive, and I suspect traders are targeting the midpoint of the August to July range at $55.55. Long-term traders that are not already long will probably wait for a correction to yesterday’s low of 51.9, while short-term traders will probably use yesterday’s low as the stop for their bullish positions.