4 Things You Need To Know About Oil Before You Trade It

As January Goes, So Goes The Year

Brent futures and WTI are trading at five and a half year lows. January has started weak – the year opened with Brent at about $58 and is now testing the $50 mark which is a significant market level.

Markets Can Remain Irrational Longer Than You Can Remain Solvent

We are at technical support levels but that is no reason to be a buyer just yet. If the current sell off were to match the 2008 bear market, $16 for Brent could be seen.

Buyers have previously bought Brent at $47; if this level breaks, the next significant demand zone is around $35 – $36.

Brent Oil has dropped significantly recently. $50 may provide support.

The Race To The Bottom With Oil

Why Is The Price Of Oil Dropping?

According to the Economist, there are four things affecting Oil:

  1. Demand is low due to weak economic activity.
  2. Problems in Iraq and Iran have not impacted their output.
  3. America is now the worlds largest oil producer.
  4. Production has not been cut by the Gulf producers.

SparkProfit’s Sentiment Indicator Remains Strongly Bearish

The sentiment indicator generated by the thousands of players around the world playing SparkProfit is at bearish extremes and has mostly been negative about Oil since September.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s