USOIL Soft on SPR Talk

  • USOil
    (${instrument.percentChange}%)

USOIL - H4

USOIL has entered its 4th straight negative week and loses around 1% today, as persistently high US inflation and OPEC+ recent dismissal of calls to increase production, has markets guessing whether US President Biden will tap the countries Strategic Petroleum Reserve (SPR).

We are not sure such a move would do much to stem inflation, which is high even in the core readings, but it definitely has the potential to affect oil prices, at least in the short term. Yesterday's weekly API Oil stockpiles were not bad, given that the buildup was smaller than forecasted and now investors look forward to the "official" EIA figures.

Black gold breaches once again its EMA200 and key 23.6% Fibonacci (of the summer Low/October multi-year high rise) around $80/barrel and as such, the technical landscape has not changed much.

The sustained weakness make it vulnerable to this month's lows (78.24), with the next support provided by the 38.2% Fibonacci (76.36), which appears remote at this stage.

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Despite Oil's precarious positions, its previous visits below the confluence support (EMA200 23.6% Fibonacci) were short-lived and we can see a push for fresh weekly highs (81.82), but at this point it seems to lack conviction for a larger recovery that will allow it to challenge October's multi-year highs (85.42).


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Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

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