AvaTrade - Analytics


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    Crude Oil- Fundamental vs Technical Analysis

    Fundamental Analysis 

    Crude inventory data has taken the steam out of the crude rally.  There is no doubt that there has been so much CAPEX cut as we have seen during the earning season but the fact is that these companies are only cutting their expenditure where their involvement is with deep sea wells. Exxon and Chevron are still dedicating more capital for the US shake oil projects.

    Iran has mammoth amount of oil stored in their tankers and they want to off load that within three months after December. What this dictate us is very simple concept. If you want to off load something quick you need to offer at a price which is better than the competitors- hence we could see the price breaking the 40 dollar.

    Having said that, sentiment is changing as investors are reading all about the CAPEX cuts and they are interested to take long positions with a view that perhaps we have formed a bottom.


    Technical Analysis 

    The momentum indicators are trading in line with the price action. The important zones are shown in the photo of the chart.

    Important Zones

    42.54-41.79 Support Zone

    49.66- 50.09 Resistance Zone


    Screen Shot 2015-11-05 at 15.26.23

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