WTI crude oil got sufficient adjustment — signs of further growth

03 February 2023 329
WTI crude oil got sufficient adjustment — signs of further growth

As it was predicted earlier, WTI Crude oil gradually lost almost all the gains earned this year. Although, that correction looks pretty well after new reached highs, market participants went a bit overboard with its scale. Probably, in the next few days, the "bulls" will be looking for the opportunity to restore at least a part of their positions.

Recent central bank meetings, ended yesterday, did not bring any surprises to investors. However, many risky assets hit several fresh highs. That optimism was not seen among oil market traders, as they were fairly disappointed about inventories growth statistics again. 

The oil market has another ace that could bring quotes up today. The U.S. will publish the labor market statistics for January. Last year the data on unemployment and job openings was usually assessed negatively as it allowed the Fed to tighten its policy and raise the interest rates more and more.

However, since the beginning of 2023 the situation has changed, and now negative statistics are more likely to lead to increased fears of recession and an even greater drop in oil prices. At the same time, fresh statistics of job openings in the USA (growth to the highest since August) may be perceived positively.

China also did not make any significant contribution to the oil price trend. That was confirmed by data on imports - purchases in January went down from 11.37 million barrels a day to 10.98 million. Now the New Year holidays are over, so it's the right time for China to speed up the pace of economic growth and energy consumption.

The range of 74.9-75 looks quite interesting in terms of purchasing WTI Crude oil. In this case, the growth target is 77.8.

The following version of trading strategy might be offered:

Buy WTI Crude oil around 74.9-75. Take profit – 77,8. Stop loss – 74,2.

Traders may also use Trailing stop instead of a fixed Stop loss at their convenience.

This content is for informational purposes only and is not intended to be investing advice.

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