Oil prices were up 0.25% on Thursday after giving up gains above $42.00 into yesterday’s close. Black gold almost hit $43.00 yesterday but pulled back to close at $41.50. This is still an 11% gain for the commodity this week after news of a potential coronavirus vaccine lifted demand hopes.
On the supply side, the news also boosted the chances of OPEC holding off on a planned supply increase scheduled for January. Algeria’s energy minister suggested on Wednesday that the group could extend existing production cuts of 7.7 million barrels per day (bpd) further into next year.
Oil had been under pressure after a second wave of the coronavirus led to new lockdowns in Europe and if Joe Biden was to become President of the United States, he has already stated the need for a lockdown, which advisers have said should be 4-6 weeks in duration. Crude needs to see an end to the lockdown stratgey in order for global demand to return.
Oil had been boosted by crude inventory data which saw a drop in U.S. oil stocks of 5.1 million barrels. This follows an 8 million reduction in the previous week. Gasoline and distillate stocks were also lower, by 3.3 million and 5.6 million barrels respectively.
Crude Oil Technical Outlook
Crude oil rallied to near $43.00 yesterday before giving up all of those gains to close near $41.50. This is a bearish bar so some caution is needed for long positions. The uptrend should still be intact after this week’s price move but a correction is possible to test support at $40.00. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
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Crude Oil Daily Chart
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