[Bitop Market Review] Crude Oil Strategy Analysis

2024年02月06日 11:05:53

Oil Prices Continue to Decline, Today's Crude Oil Market Analysis!


During the Asian trading session on Tuesday, February 6th, crude oil prices have witnessed a consecutive decline of nearly 10% over the past week, marking the largest drop in two months. Last Friday evening, the United States released job data significantly exceeding expectations, leading to a dampening of expectations for Fed rate cuts. Consequently, the US dollar surged, exerting noticeable pressure on risk assets, including crude oil and copper, causing their prices to weaken.


Saudi Aramco has set the official selling price for Arab Light crude oil sold to Asian regions in March at a premium of $1.50 per barrel over the average of Oman and Dubai prices, maintaining stability. Additionally, the latest data from the US Commodity Futures Trading Commission (CFTC) shows that as of the week ending January 30th, speculative net long positions in WTI crude oil futures increased by 18,082 contracts, reaching 117,226 contracts. Despite speculative net long positions continuing to flow back as oil prices rose previously, bullish sentiment waned rapidly last week, with sentiment quickly shifting within a week, putting pressure on long positions. This performance further confirms the lack of sufficient one-sided drive in the current crude oil market, indicating that the tug-of-war between bulls and bears will continue.


Last week, crude oil prices formed a neutral candlestick, retracting the previous week's gains, resulting in a pattern where the weekly close engulfed the previous candlestick. This complete retracement indicates that the market remains in a state of confusion, making it difficult to determine whether there is a strong or weak trend. The retracement after the close indicates that this week will continue to focus on the support around $71.0-$70.0 per barrel to determine the range of fluctuations for the week.


Currently, the short-term trend tends to be downward, but to confirm whether there will be a breakout will determine the extent of the move. The probability of a breakout at the beginning of the week is relatively low, so it is more inclined to continue the range-bound fluctuations. It is advisable to wait until the opening of the European market to first determine the intraday range and then decide on entry points for trading. Overall, for short-term crude oil trading, it is recommended to focus on resistance around $74.0-$75.0 per barrel and support around $71.0-$70.0 per barrel.


Disclaimer: The article is contributed by the market analyst from Bitop market observation team. The content is solely for personal opinions and sharing. The analysis is time-sensitive and provided for reference and discussion only. It does not constitute any investment advice. The market is risky, so investing should be done cautiously.