June Crude Oil continued its trek higher today (Thursday, April 28) rebounding off its overnight low of 44.94 and making a new high at 46.14. Traders reacted to a plunging US dollar as it broke down through the 94.00 mark and closed near the April lows of 93.62 at 93.725. The Dollar fell as the Japanese Central Bank shocked the market by leaving interest rates alone after implying last week that further easing was necessary to keep the Yen weak. Traders didn’t like this and took the Yen over 2 points higher on the news. Crude was able to make a new high for the move keeping the bullish trend intact. The rally in Crude has been amazing in the face of a continued supply glut and the failure of the OPEC – NOPEC production freeze meeting. Russian and OPEC supply continues to grow and with prices nearing $50 you could see US producers come back online. Some producers have said they are ready to sell some oil up at these levels. Managed accounts have been a driving force as Crude breaks above technical levels causing them to buy. These traders are building immense long positions in my opinion and when the fundamentals reassert themselves watch out below. Until that happens I think you should look to buys dips in the market looking for Crude to attempt to reach $50. If Crude gets below 42.50, the scenario changes in my opinion. That could be when the managed money start to get out of their long positions.
High – 46.14
Low – 44.94
Last – 45.88
Daily Pivots for 4/29/16:
|
R2 |
46.85 |
|
R1 |
46.37 |
|
PIVOT |
45.65 |
|
S1 |
45.17 |
|
S2 |
44.45 |
|
|
For those interested I hold a biweekly livestock webinar on Wednesday May 4, at 3pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon signup.
