Crude Oil Prices Show Signs of Consolidation, as Traders Remain WaryCrude oil traders remained relatively on the sidelines at most part of Asia’s trading session on Tuesday as the black liquid hydrocarbon hovered below the $40/barrel, showing signs of consolidation, after oil traders got a blurred outlook from OPEC’s latest report on global crude oil consumption.
In spite of the previous narrative stated above oil traders remain long in the longer-term on the bias that a COVID-19 vaccine will disrupt the viral onslaught and trigger economic growth on the upside.
However in the near term, traders are worried about the astronomical surge in COVID-19 caseloads as data retrieved from John Hopkins University revealed cases of COVID-19 exceeded 28.9 million globally as of September 15, strengthening the level of uncertainty that continues to play out in crude oil’s price action.
Oil traders are presently focused on any warning signs about global energy demand, with the American Petroleum Institute, expected to affirm the strength of gasoline demand later today, as any build could send the price of Brent crude below the $38.50/barrel.
Traders are concerned about the draw in inventories and that’s partly responsible for the low volatility in play at the energy market.
The present price actions reveal that the West Texas Intermediate is within a symmetrical triangle pattern. Crude oil traders should be aware at the time of writing it’s currently around the $37 and $38 price levels.
A breach from the triangle pattern could take the hydrocarbon price towards the $36 price, while a bullish breakout from the symmetrical triangle could see it bouncing to the $39 price level.
Traders will also look at the outcome of the OPEC+ meeting scheduled to hold on Thursday, anticipating what steps the oil cartel group will take in fending off sluggish demand for gasoline amid the ravaging COVID-19 onslaught.
Hence, traders expect crude oil prices to rebound, albeit slowly once economic activity starts to pick up again.