The current setup in the oil market (opportunities and risks)
Member Report - 10 aspects for and against a higher oil price and my conclusion
Hello subscribers,
this week’s Member Report is about a comprehensive overview of the technicals, fundamentals and current driving aspects in the US oil market.
I will evaluate the current setup for crude oil, give you my conclusions and tell you how I trade the setup via crude oil futures.
After reviewing the week's fundamentals each week, I come up with the following pros and cons for continuing the oil rally:
Bullish drivers of a higher oil price
Low inventories in the US
Oil inventories in the US are low as you can see on these charts. Here it will be key to observe if Cushing stocks or US ending stocks, in general, are able to form a bottom and rebuild stocks. Till this is happening - it’s bullish for oil. Nevertheless, I have to point two things out. First of all many people refer to the low SPR reserves - but these reserves are shrinking steadily since 2017. Moreover, the gasoline inventories were picking up drastically over the last few weeks and are now back in a healthier region.
Bullish cycle momentum