Crude oil - ready to correct?
There’s undoubted skittishness in crude oil at the moment, in much the same way that it can be seen across US equities and stock indices. Again, this comes as traders and investors come to terms with a possible market turning point, and struggle to adjust accordingly. Crude looks as if it is breaking out from its long-running downtrend. This morning, front-month WTI hit its highest level since early October, coming within 25 cents of $75 per barrel. While recent dollar strength is providing a headwind to all dollar-denominated commodities, crude continues to make good upside progress. But it will need some sort of corrective pullback, followed by another significant advance, to garner the wider attention that a sustainable bull run requires. The daily MACD still indicates that momentum is to the upside, but it is approaching levels which have previously preceded a sell-off. The depth and shape of the next decline, whenever that may come, will provide clues as to whether this bull run has legs or not.
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