Oil Playbook ( 2021 ) CRUDE OIL FUTURES (CONTINUOUS: CURRENT CONTRACT IN FRONT) NYMEX:CL1! trade-God Prices for Crude Oil are down -20% from last year which means the bearish outlook is priced in. The bearish outlook is that the -16% drop in consumption outweighs the -7% drop in production plus the 4% increase in inventory stockpiles. Bulls want to know if demand has bottomed or not and since consumption tends to be highest in Jan-Feb, it might have further to fall since travel is still lagging. However, circling back, the -20% discount in crude prices indicate the market is fundamentally balanced given the uncertainty. Production 2019 Average: 12,197 2020 Average: 11,318 %Change: -7.76% Stockpiles 2019 Nov: 1,918 2020 Nov: 2,003 %Change: +4.24% Consumption 2019 Average: 1,070 2020 Average: 916 %Change: -16.81% Exports 2019 Average: 8,471 2020 Average: 8,407 %Change: -0.76% Trading Strategy Swings in the dollar index are primarily moving prices so this will create the trading opportunities in the near term. Get ready. There is a momentum divergence on the DXY daily chart and the RSI has some room to run. Crude prices have reached a resistance level . If the Dollar index does start to rally then crude prices are going to waterfall. Best to wait for a decisive candle closing below the 10 day EMA before making a short trade. Trading is risky. Don't do it. Long oil /gas producer equities KMI , LUKOY, EQT