Good morning Traders!
The EurAsia group produced their annual review report on what they foresee as the top risks of 2023. I’m sure, like me, you would also appreciate a break from all of the serious drama going on in the world, especially after the last few years. Sadly, it seems like it might get worse before it gets better.
One of items covered, which also included the Russia/Ukraine war, Global Warming, Misinformation on Social Media and inflation shockwaves, is higher oil prices as a result of increasing friction between OPEC+ and the United States.
OPEC stands for the Organization of the Petroleum Exporting Countries and is made up of a cartel of 13 countries.
The Weekly chart for West Texas Instruments, which is a reliable indicator of U.S. crude oil currently shows that the price has been trending lower since its peak in mid-June 2022.
U.S. oil and UK Brent crude are also very highly correlated; close enough that one could be substituted for another.
Prior to the highs, the chart shows a steady uptrend from 2020 all the way through until the spike triggered by Russia’s invasion of Ukraine.
What are traders watching out for next? Well, if prices are going to begin climbing again, one of the clearest signs would be price breaking up through the blue trend line currently running down the right side.
This by no means says how far prices will rise, just that the momentum has shifted from bearish to bullish.
This week shows a bullish candle forming, which could turn out to be a higher-low and give birth to the next move higher.