Great news for oil bulls! OPEC and its allied producers agreed to expand output cuts for the next month.
WTI oil: too much for bulls?
$68 per barrel was the highest mark for WTI oil since October 2018 - a 2.5-year-high! Staring in November 2020, it was almost a straight line from around $30 to this mark.
Observers say the bullish rally was too quick. There were a lot of mid-tern factors that lifted it - from a failed missile attack on Saudi Arabia's main oil production facility to OPEC+ recent decision ton the supply cuts and Texas's winter taking away February's due supply from the US. These factors helped lift the price but did not necessarily stabilize it in the long-term. Strategically, global economic recovery is the main impact factor for the oil price.
In the meantime, most economists agree that nothing stands in the way of oil rising again. At the end of the day, the recovery is on the way, and the virus keeps gradually subsiding.
Therefore, a cautious approach to trade oil would suggest the following.
How to trade oil's correction
- Watch how oil behaves in the coming hours and days
- Ensure there are no further downward indications
- Ensure the correction is over and bulls are in the game again
- If the uptrend is confirmed, buy at market and aim at selling above $65
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In this article, you'll find the latest news and tech analysis of EUR/USD, gold, and GBP/USD!