Why Crude Oil Bears are Clawing Down Crude Oil Breakouts

A close correlation with investors’ sentiment seems to suggest a supportive near-term backdrop as global equities ticked higher flagging risk appetite upsurge by investors.

Although crude oil bears have been able to cap crude oil prices breakout from these resistance levels on last week surge in the US rig counts and rising COVIDD-19 caseloads around major global economies thereby dampening crude oil traders resolve in taking more long bets.

The U.S crude oil benchmark dropped lower from the hurricane spike high this morning as the storm effect looks less of a major concern than initially feared.

WTI prices remain attached to the price range around the $42.20-43.90 area. A breach above this range could pave the way for the liquid black gold to test the $50 resistance level. On the flip side, a move below the critical support level around the $38.75 price level may set the stage for Crude oil bears taking WTI prices to the $34.40-75.

While Brent crude prices have presently breached its last week’s highs above the $45 price level, the bulls seem to be out of gas to push further. Brent is holding on to its Hurricane priced gains due to possible storm affecting crude oil supplies, that American refineries could use to satisfy fuel demand coming from Europe’s major economic hubs.

Crude oil bulls are roaring on growing concern that there could be gasoline shortfalls in the world’s largest economy if American refineries remain closed due to the Hurricane’s pending onslaught.

The key to near term crude oil price movements will be if there are any refinery damage caused by the storms and the news on the COVID-19 vaccines already in the pipeline.

While major oil producers plan on keeping crude oil output relatively tight, the potential for America’s production in ticking upward remains a risk to the near-term view.