Listen to the latest market mood for the USOIL.
The fall in European equity futures and Asia-Pac indexes show the market entering the day with a risk-off setting.
The crude oil market has marched on recently with strength, but this rally is unsustainable. There is a swathe of negative news now for oil:
- rising virus cases from California to Hong Kong,
- stalling progress towards a US stimulus package,
- rising US-China tensions,
- approaching tropical storms that could shut down US refineries,
- rising US stockpiles after another inventory build yesterday,
- OPEC+ production cuts are set to expire next month.
Therefore expect oil sellers at market.
Swing trade outlook – We expect this trade to play out over the next 3-5 days.
- If there is a positive turn in risk and risk-on sentiment returns that can keep oil’s rally going.
- Surprise progress in the US stimulus bill could turn sentiment positive and invalidate this outlook.
- Any good COVID-19 vaccine/treatment news could also invalidate this outlook.