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Crude Oil

Market Opportunities - 20/05/2021

20 May, 2021

The example below uses Contracts For Difference (CFDs). Calculations are only on the price of the specific instrument on the date below and calculations indicate a possible opportunity for profit or loss. No representation or warranty is given as to the accuracy or completeness of this information, consequently any person acting on it does so entirely at their own risk.

Crude Oil weekly uptrend opportunity based On 1.00 Lot Calculation:

  • VACCINATION PROCESS EXPANDS GLOBALLY WITH 1.54 BILLION DOSES BEING ADMINISTERED SO FAR AT AN AVEARGE DAILY RATE OF 25.6 MILLION DOSES. The expanding vaccination process keeps chances high that more and more countries will reopen into the summer, which could increase travelling and therefore fuel consumption could rise. This tends to support oil prices.
  • OIL DEMAND IN CHINA CONTINUED TO RECOVER: Analysts expect crude oil imports to rise to 11- 11.5 million barrels per day in the coming period, which would be up from April’s 9.82 million barrels per day.
  • USA Oil and Gasoline demand continued to recover as we are approaching the start of the driving season (Memorial Day May 31): US Oil Inventory (Week May 10 - May 14): The Energy Information Administration estimated on Wednesday a crude oil inventory increase of 1.321 million barrels. Analysts had predicted an inventory increase of 1.623 million barrels. The Energy Information Administration reported a decrease of 1.963 million barrels of gasoline. The EIA reported a distillate inventory decrease of 2.324 million barrels. This week’s decrease compares to analyst expectations for a 0.386 million-barrel decrease for the week.
  • EUROPE and the UK are starting to reopen gradually, which could boost oil consumption expectations for the summer. Earlier this week, the EU said that they will open borders for fully vaccinated people, which should increase volume of travelling throughout the summer.
  • ANALYST OPINION (GOLDMAN SACHS): Expected oil demand to rise by 5.2 million barrels per day in the next six months. Brent oil price estimate: $80 (Crude oil~$77).
  • TECHNICAL OVERVIEW: Crude oil has been trading in a channel between $63 and $66.5 since late April 2021, which could suggest that the mark of 63 (or the area below 63) plays a role of strong support. Crude oil earlier this week fell below 63, but it quickly came back above it, to confirm short- term that 63 could be considered a strong support level. In addition, the H4 Relative Strength Index fell to its oversold threshold of 30, which could signal an upward recovery.

Crude Oil, May 20, 2021
Current Price: 62.37

Crude Oil

Weekly

Trend direction

UP

Resistance 3

68.00

Resistance 2

66.50

Resistance 1

65.00

Support 1

59.80

Support 2

58.50

Support 3

57.30

Example of calculation base on weekly trend direction for 1.00 Lot*

Crude Oil

Pivot Points

Resistance 3

Resistance 2

Resistance 1

Support 1

Support 2

Support 3

Profit or loss in $

5,630.00

4,130.00

2,630.00

-2,570.00

-3,870.00

-5,070.00

Profit or loss in €**

4,615.85

3,386.05

2,156.25

-2,107.06

-3,172.89

-4,156.73

Profit or loss in £**

3,982.88

2,921.72

1,860.56

-1,818.12

-2,737.79

-3,586.71

Profit or loss in C$**

6,814.55

4,998.95

3,183.35

-3,110.73

-4,684.25

-6,136.73

* 1.00 lot is equivalent of 1000 units
** Calculations for exchange rate used as of 12:00 p.m. (GMT+1) 20/05/2021
Fortrade recommends the use of Stop-Loss and Take-Profit, please speak to your Client Manager regarding their use.
*** You may wish to consider closing your position in profit, even if it is lower than suggested one
**** Trailing stop technique can protect the profit – Ask your Client Manager for more details

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