On the daily chart below, we can see that the price is still stuck in the range between the support at 72.00 and the resistance at 82.00. There’s uncertainty in the market for what comes next and a clear battle between buyers, who are betting on resilient global growth with Chinese demand and tight supply keeping up prices, and sellers, who are betting on weaker demand as central banks take their policies well into restrictive territories.
We can also see that the low was near the $70 level as that was the price at which the US said they will start to refill their Strategic Petroleum Reserve (SPR). The levels are set though: get above 82.00 and the buyers will start to target the 93.00 level, on the other hand, get below 72.00 and the sellers will look for prices in the $60 region.
On the 4 hour chart below, we can see more closely the current rangebound price action. The price recently bounced once again from the support area at 72.00 and started its rally towards the 82.00 ceiling.
That’s the target for now and it’s likely that we will see another rejection there. The best strategy in such instances is to stay out of the market or to “play the range” where one can buy at support and sell at resistance with defined risk.
On the 1 hour chart below, we can see the recent news of Russia intending to cut oil production by 500k BPD in March. The price spiked up, as less supply is bullish for the black gold, but had a hard time to really kick off a strong buying wave.
In fact, we saw a big pullback some time after erasing all the gains. Right now, the moving averages are pointing north and we should see the price getting to the 82.00 zone.
