Will crude oil rebound after its recent decline?
The crude oil futures contract traded sideways on Thursday, closing 0.05% higher. On Wednesday, it dropped to a low of $65.22 - the lowest level since the September 10 low of $65.27 last year. The decline was driven by weak economic data and geopolitical uncertainty. However, oil rebounded despite higher-than-expected inventory data.
This suggests the beginning of a short-term consolidation. Today, oil prices are up 1.3%, retracing more of Wednesday’s decline.
Conclusion
Crude oil is currently consolidating after its recent pullback. Today’s rebound is supported by a weaker USD, but no clear bullish signals are evident.
Is this a good time to open a short position? I don't think so - the market is approaching strong medium-term support levels and could move sideways or rebound.
For now, my short-term outlook is neutral.
Here’s the breakdown:
- Crude oil is moving sideways, consolidating after its recent declines.
- In my opinion, the short-term outlook is neutral.
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Thank you.
Paul Rejczak,
Stock Trading Strategist