Tuesday, 8 March 2016

WTIC Oil - resistance is near

Along with equities, WTIC Oil, continues to broadly climb from the Feb'11th low of $26.05, with a net daily gain of $1.57 (4.3%) to $37.90. Near term outlook offers the 38/40 zone. Sustained price action in the 40s looks extremely unlikely, as the underlying issue of over-supply remains 100% unresolved.

WTIC, weekly

WTIC, monthly


The current rally is arguably no different to those periodically seen last year, with the broader trend remaining bearish.

The $26s look no more a floor than the low from last August, when many touted the $37s as the floor.

In terms of downside...

On a break <26, first target is the psy' level of $20, with secondary target zone of $16/15.

Considering overall demand, but more importantly.. supply issues, the mid teens look highly probable.

How fast the energy industry capitulates - with mid tier (listed) bankruptcies.. is difficult to say.

Looking ahead

Tuesday has nothing of significance scheduled, and price action will likely be even more subdued than today.

Goodnight from London