The price of crude oil has moved to a new cycle high today of $ 88.87. That price pulled off the January 28 high price of $ 88.84 but only by 3 pence and made a new 7-year high.
The breakdown and lack of running, has led to a rotation back to the downside and into the meat of the recent trading range. The current price is trading at $ 87.93.
Looking at the hourly chart above, the pair has been trading between $ 87.10 and $ 88.87 since January 26. There are two separate highs near the top and 3 separate lows near the lower end.
Needless to say, the buyer and seller are in a battle and waiting for the next turn.
OPEC + will meet tomorrow where expectations are for a continuation of the 400,000 BPD increase in production. However, there are some in the camp who believe that the recent high price requires an even greater increase in production.
Goldman Sachs is out with a report saying:
“We see growing potential for faster growth at this meeting, due to the rapid pace of recent accumulation and the likely pressure from importing nations.” They noted that prices are now above the levels before what it described as “small”. An intervention led by the United States last November.If they do, moving below the lower end would be counted with moves to $ 82.78 and $ 81.81 as low targets.
PS near the low is the rising 200-hour MA currently at $ 86.14. This moves closer to the lower end and will increase the bearish bias if broken. Until then, buyers are still holding on to a stronger hand (have control).