Specific analysis and ideas of crude oilThe biggest mistake in life is constantly worrying about making mistakes. The greatest sadness in life is not losing too much, but caring too much. This is also a major reason why a person is unhappy.
Last Friday, according to a report from The Wall Street Journal, there were internal discussions within one of the OPEC member countries, the United Arab Emirates, about the possibility of exiting OPEC. The report indicated that there are significant differences between Saudi Arabia and the UAE on various issues, including production capacity releases, competition for foreign investment, and the conflict in Yemen.
The market is concerned that if the United Arab Emirates were to exit OPEC, it would directly undermine the overall influence of OPEC. As a result, WTI crude oil was hit, dropping by 2.7% to $75.83. As a consequence, our previous bearish view on crude oil has yielded good results, and we hope everyone has gained profits. However, later, UAE officials denied the aforementioned report, stating that the UAE has no plans to exit OPEC. As a result, WTI crude oil quickly rebounded, recovering all losses and rising to $79.9, approaching the $80 mark.
Many people are now concerned about whether they should chase the rise of crude oil. Indeed, the decisions made by OPEC member countries will affect the trend of crude oil. Considering that the main disagreement driving the oil market currently is the demand outlook, and in the context of Russia's production cut in March, OPEC+ maintains a strong influence on the market. Therefore, in the short term, oil prices rebounded quickly after the UAE denied its exit from OPEC. However, investors should pay attention to the relationship between the UAE and Saudi Arabia.
With the expectation of a recovery in demand, oil prices are expected to break out of their three-month consolidation range. According to some reports and data, a medium to long-term upward trend in oil prices may have been established, but the process is unlikely to be smooth. From a medium to long-term perspective, the upward trend in oil prices is expected to be established, but considering that US service sector inflation remains high and is difficult to quickly fall back in the short term, this will exacerbate the risk of economic recession in the US and thus impact demand prospects.
Investors this week should pay particular attention to the semi-annual monetary policy testimony of Federal Reserve Chairman Powell in both houses of Congress, as well as key events such as US non-farm payrolls for February, China's trade balance, CPI and PPI, M2 and social financing data, which are expected to have an impact on oil prices in the future.
Technical analysis:
The daily chart shows that WTI crude oil stabilized above $77.0 and further rebounded to touch the $80 level, indicating that the bulls have further upward momentum. It is expected to break through the consolidation range of the past three months ($73.0-$83.0). The author maintains a cautious bullish view on oil prices.
If the oil price breaks above $83.0, it may open up further upside potential, and even have the potential to test the $100 level in the medium term. However, if the oil price falls below $73.0, it is necessary to be vigilant about the possibility of further downside and a potential test of the key support level of $70.
Operation idea:
The main strategy is to buy on dips, and it's also possible to chase the price higher when it breaks through 82. Given the unclear news, it's important to control the position size.
