Oil Price Talking Points:
Crude Oil Prices Spike to Eight-Month High, Begin Pulling Back
WTI crude oil prices caught a significant bid shortly after the 2020 open, driven by the drone attack on Iranian General, Qassem Soleimani[1]. Comments from President Trump after-the-fact threatened even more military action should Iran retaliate, and global markets have been waiting for the next item of fear to hit the headlines before continuing to push prices higher.
That hasn’t yet happened and as the first full week of the New Year gets underway oil prices have been giving back gains. This begs the question as to whether this recent flare of strength will be reminiscent of the September spike. Around that event, oil prices jumped-higher after a Saudi oil field was attacked by drones widely thought to have come from Iran. Around that event, oil prices cooled in the days after and two weeks later that spike was entirely priced-out of the market, and then some.
WTI Crude Oil Daily Price Chart
Chart prepared by James Stanley[2]; Crude Oil on Tradingview[3]
Crude Oil Prices: Force Meets Resistance
That bullish breakout in crude oil has run into a key area of resistance, spanning from 63.11-63.71. The latter of those levels comes from the 61.8% retracement of the Q4 2018 sell-off, while the former is the 14.4% marker of the recovery move that spans the December 2018 low up to the April 2019 high. This zone caught lower-high resistance in May of last year followed by a re-test around that September spike that was quickly faded-out of the market.
WTI Crude Oil Daily Price Chart
Chart prepared by James Stanley[4]; Crude Oil on Tradingview[5]
Crude Oil Price Strategy
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