Advertisement
Advertisement

Oil Tries To Settle Above The $45 Level

By:
Vladimir Zernov
Published: Nov 24, 2020, 15:56 UTC

Oil managed to get above August highs at $43.75 and developed strong upside momentum.

WTI Crude Oil

Oil Video 24.11.20.

Oil Is Ready To Continue Its Upside Move

Finally, oil managed to get above the resistance at August highs at $43.75 and gained strong upside momentum.

The vaccine-related optimism supported the oil market in recent days. However, this optimism alone was not sufficient enough to push oil towards levels last seen in early March 2020.

It looks like the main catalyst for today’s price action in the oil market is Joe Biden’s decision to nominate former Fed Chair Janet Yellen for Treasury Secretary.

Janet Yellen is a well-known dove which means that the Fed will keep rates at the bottom for years to come. This is bullish for all riskier assets including oil. In addition, traders expect that U.S. will provide another round of economic stimulus in early 2021, boosting economic activity and demand for oil.

At this point, there are many bullish catalysts for oil, and traders focus on the longer-term outlook for oil demand.

This optimism will soon get tested by the latest inventory data from API and EIA. Analysts expect that crude inventories will decline by about 0.3 million barrels. If crude inventory draw is bigger than expected, oil will get an additional boost.

Houthis Attack Saudi Aramco Facilities In Jeddah

In addition to the above-mentioned catalysts, oil got support from the recent developments in the Middle East.

Yemeni Houthis attacked Saudi Aramco facilities in Jeddah but did not manage to deal much damage. While the main Aramco’s assets are located miles away from the site, the new attack raised concerns about the security of supply from the world’s leading oil producer.

While this attack will not lead to disruptions in oil supplies, it came at a time when oil traders are ready to increase purchases of oil on any bullish news.

Put simply, the market sentiment is very bullish right now so news about tensions in the Middle East provide material support to oil.

Most likely, this story will not develop further, and the market will forget about Houthis until their next strike which happen from time to time.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

Did you find this article useful?

Advertisement