As explained in a previous Light Crude Oil (CL) analysis, as major economies go into lockdown, oil demand continues to fall off a cliff. A few weeks ago, the U.S. was doing very little against the corona virus propagations, but things have changed dramatically. In just a couple of weeks, there has been a proliferation of school cancellations, mass gathering prohibitions and mandatory telework orders, following suit with what has been done in other countries like China, France and Spain. Restaurant and many other businesses closures have happened.
In the mean time Light Crude Oil continued to drop, it dropped so much that it has reached unprecedented lows dropping underneath $20 a barrel, the lowest price in many years.
Oil prices were up on Tuesday amid increased hopes that OPEC and Russia will agree to cut production at a meeting on Thursday. Oil prices have plunged more than 66% this year because of the twin hits of the coronavirus outbreak slashing fuel demand and a price war between top producers Saudi Arabia and Russia.
There are great short opportunities much higher around $55 a barrel, but still a long way to go. Crude Oil is very cheap now, it’s at a bargain. Many investors will probably be buying Crude Oil futures and oil related stocks since these assets haven’t been so cheap in ages.
Watch Light Crude Oil futures (CL) analysis in the video below.
he West Texas Intermediate (WTI) benchmark for US crude is the world’s most actively traded commodity. Crude Oil prices displayed in Trading Economics are based on over-the-counter (OTC) and contract for difference (CFD) financial instruments. Our market prices are intended to provide you with a reference only, rather than as a basis for making trading decisions. Trading Economics does not verify any data and disclaims any obligation to do so.
This is the kind of price action technical analysis you will learn in our trading community. You will learn how to locate new supply and demand imbalances and trade without using any indicators, no news, no fundamental analysis, no earnings announcements, no volume or VSA analysis. Just supply and demand imbalances.
Trading supply and demand imbalances is ideal for beginners and those with a full or half time job, you won’t need to stay in front of the computer all day long trying to move price action with your mind.
As supply and demand traders, we do not need to pay attention to the news, fundamentals or any earnings reports. Once a big timeframe imbalance has gained control, earnings do just the opposite and react strongly to those imbalances. Why is it that you see positive earnings and then the underlying stock drops like a rock, or a negative earnings announcement and the stock rallies like a rocket out of control? You are probably missing the fact that there are big imbalances gaining control.
Unless you are doing very short term trading and scalping, you should not worry about fundamentals or earnings announcements on Crude Oil.
You can use these imbalances to plan your trades in lower timeframes. Trading is just waiting for the right trigger points and scenarios to present themselves, this game has got a name and it’s called the waiting game. We need to patiently wait for the correct scenarios and setups to happen and wait for price to pullback or dip into the price levels we want to trade, in our case these price levels are made of supply and demand imbalances.
If you want to learn how to trade using our supply and demand trading strategy, join our supply and demand futures trading course.
There are several ways of buying stocks and futures. When trading stocks, you can buy shares of the underlying stock or use options strategies to go long or short at these specific supply and demand levels, long calls or long puts or spreads. You can even buy a CFD (contracts for difference) if you are in a country where it’s allowed.
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