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Hugo in HTO Trading,

Crude Oil: Bottomed

Last week marks the fourth consecutive week with a drop in the rig count. The price spiked, largely due to a drop in United States (US) production. According to data from the US Energy Information Administration (EIA), June 2015 oil production totaled 9.29 million barrels per day, down from 9.61 million in April and 9.4 million in May.

Since the beginning of the year oil prices fell more than 14.0% and is holding at a weekly resistance. Last week crude oil went back and forward with a narrow range week and close in the green near the open of the week, creating an inside week. The commodity is in a potential phase change from bearish to a recovery phase and the stochastic is showing a bullish momentum although is still below the 50 mid line.

Expecting an upward move to a key level at 54.42 on a break above previous weekly resistance at 47.78 (scenario 1) or a break below the weekly resistance at 43.56 could push oil prices to year low at 37.74 (scenario 2).

LCrude is a CFD written over Light Crude futures.