Oil : Still Optimistic despite Horrible US Labor Data
(Fri, 8 May 2020). Crude oil prices were higher as risk appetite revived. Investors hope reopening economies will see higher energy demand. Gold prices remain well supported, however Crude oil prices rose on Friday despite the approach of official US labor market data which are expected to show more than 20 million jobs lost last month thanks to coronavirus-induced economic shuttering.
Investors are reportedly prepared to look past even this ghastly prospect and anticipate further reductions in lockdown measures around the world. France, parts of the United States and other countries are already considering or implementing a cautious rollback, with Australia set to join them.
These hopes have been enough to put another week of gains on the table for energy prices. Output cuts agreed last month have kicked in during May, but demand has been decimated and storage tanks remain fully. The existing glut of petroleum and refined product now in storage will need be worked through to end users and this may well cap prices despite recent gains.
CRUDE OIL PRICES TECHNICAL ANALYSIS
US Crude Oil Prices, Daily Chart
The daily chart uptrend prevailing since April 21 continues to hold sway, with prices currently right in the middle of their upward channel. The last three days have seen little progress, however, and if that trend continues a test of the lower boundary will look more likely than an upside breakout. That base comes in at $20.65. Bulls probably need to retake and secure psychological resistance at $30 to make further rises stick, but there seems little chance of their doing that at least until those US payrolls numbers are out.
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