Yesterday's trading session ended up with local highs set by oil prices at $103,45/b. The rally has been firm since January 9th 2014. At that time, the price found the bottom at $91,24. The prices gained $1,48/b yesterday alone.
The futures on light sweet oil have been trading within the $101,69-103,45/b range since February 18th. Today's trading session opened in the middle of the mentioned price range.
At this point, the fluctuations are taking pace around $102,20-102,30/b.
Why Are Oil Prices Growing?
Oil prices have been growing amid lower supply from Venezuela and Nigeria as well as amid strikes in Libya. At the same time, the USA seems to be showing higher demand for crude oil amid cold weather that requires more oil for heating needs.
A weaker dollar is another reason why oil prices are growing. Oil exporters are benefiting from higher oil prices. At this point, oil prices are fluctuating within a price range since global economic conditions are uncertain and unstable.
Investors are looking forward Thursday's oil report from the EIA. They believe the report will indicate lower oil inventories once again, which is likely to push oil prices even higher. If the Fed keeps on tapering the monetary stimuli, this will definitely provide more support to the American currency in the near future.
At the same time, investors are getting increasingly interested in the US Dollar as an investment asset amid more signs of a US economic recovery, which is currently underway.
How to Benefit from Oil Prices?
Market Leader asked Masterforex-V Academy to comment on the matter and analyze the CL (USOIL) ticker in MetaTrader4.
The mid-term trend is bullish (red count). The retracements are less than 50% of the momentums. The blue horizontal lines indicate the range of consolidation the price has been staying in sice February 18th.
If the price keeps going down, it may well touch or at least come close to the bottom of the rage at $101,69/b. On breaking below the bottom of the range, the price may see further decline down to $100,65/b and lower.
Alternatively, the price may grow up to the top of the range located at $103,79/b. On breaking and consolidating above it, the price may well hit $104/b. In this case, the strengthening will indicate that the retracement is over and a new bullish momentum is under way.
