The price of crude oil moved to a new cycle high today of $88.87. That price took out the high price from January 28th at $88.84 but only by 3 pennies and made a new 7-year high.
The break and lack of run, has led to a rotation back to the downside and into the meat of the recent trading range. The current price trades at $87.93.
Looking at the hourly chart above, the pair has traded between $87.10 and $88.87 since January 26. There are two separate highs near the peak and 3 separate lows near the lower extreme.
Needless to say, the buyer and sellers are in a battle and awaiting the next shove.
OPEC+ will meet tomorrow where the expectations are for a continuation of the 400,000 BPD increase in production. However, there is some in the camp who believe the recent high price demands an even greater increase in production.
Goldman Sachs is out with a report saying:
"We view growing potential for a faster ramp-up at this meeting, given the pace of the recent rally and the likely pressure from importing nations." They noted that prices are now above the levels prior to what it described as a "small" US-led intervention last November.If they do, moving below the lower extreme would be tell with moves toward $82.78 and $81.81 as downside targets.
PS near the low is the rising 200 hour MA currently at $86.14. That is moving closer to the lower extreme and will increase the bearish bias if broken. Until then, the buyers are still holding the stronger hand (have the control).