Oil prices have climbed their way back to resistance levels and are poised to test a new range, if US and global equity markets will just give them the momentum they need. Prices piereced the $90 per barrel level on Tuesday, but failed to gain the needed traction to break through resistance.
On Monday, the Paris-based IEA reduced its estimate for oil demand this year by 200,000 barrels a day and by 400,000 in 2012. Worldwide consumption will rise 1.2 percent to 89.3 million barrels a day this year and 1.6 percent to 90.7 million in 2012. A full resumption of exports from Libya following the ouster of Muammar Qaddafi will be “long and difficult,” said the energy- security adviser to developed nations.
Despite this likely decline in demand, supply will probably lag, creating a balance markets for the near term. If there are any unexpected supply disruptions, prices could re-test higher levels.
WTI oil’s five-day stochastic oscillators climbed above 80, signaling prices have increased quickly, which could have been a reason for Tuesday’s failure to break resistance. Futures also stopped advancing yesterday before the 50-day moving average, at $90.60 a barrel.
The current resistance which was former support seemed to have held nicely, but a close above 90.70, is likely to see a move toward $95.
The Trade – purchase a daily binary option call on a daily close of WTI above 90.75. Cap the trade at 91.50.
Summary:
Asset : WTI crude oil
The trade : Binary Call Option
Expiry time : End of day
When : purchase a daily binary option call on a daily close of WTI above 90.75. Cap the trade at 91.50.
The result : NA price went through cap
