Crude Oil Price Outlook Volatile as Covid Clashes with Vaccine Hope

Oil Chart

CRUDE OIL PRICE PRIMED FOR VOLATILITY AMID CONFLICTING FUNDAMENTAL DRIVERS

  • Crude oil has climbed a whopping 18.5% aloft month-to-date
  • Potential for oil cost sensitivity looks expected due to churned outlook
  • Commodity traders strife over lockdown risk, vaccine optimism

Crude oil cost movement climbed 5.7% this past week. The latest allege solidified 3 uninterrupted weeks of gains, fluctuating a month-to-date convene to an considerable 18.5%, and moving a commodity to a top tighten given early September.

Oil prices have broadly benefited from encouraging vaccine results and analogous alleviation in marketplace sentiment. This is since a instruction of wanton oil broadly marks tellurian GDP expansion expectations, and confident covid vaccine headlines have reinforced prospects for destiny mercantile activity.

CRUDE OIL PRICE CHART: DAILY TIME FRAME (27 JUL TO 20 NOV 2020)

Crude Oil Price Chart Forecast

Chart by @RichDvorakFX combined regulating TradingView

Following a pointy climb over new trade sessions, however, wanton oil upside intensity now looks mostly exhausted. This is essentially deliberation that element downside risks, such as ascent coronavirus lockdown measures, mount to quell direct for wanton oil and import negatively on short-term outlook.

Complacency so seems increasingly prevalent during stream levels as oil traders boot nearside threats to direct while vaccine wish keeps markets forward-looking. Furthermore, a JMMC assembly this past week unsuccessful to ease supply concerns with OPEC+ demure to check a designed prolongation hike.

Understanding a Core Fundamentals of Oil Trading
Understanding a Core Fundamentals of Oil Trading

CRUDE OIL PRICE CHART WITH VIX INDEX OVERLAID: DAILY TIME FRAME (26 MAY TO 20 NOV 2020)

Crude Oil Price Chart with VIX Index Overlaid

Chart by @RichDvorakFX combined regulating TradingView

That said, wanton oil cost sensitivity could accelerate in a days forward as a commodity continues to vacillate within a proportions of a extended trade operation shaped over a final 3 months. The ubiquitous miss of instruction appears facilitated by this juncture of bearish short-term headwinds and bullish long-term outlook.

As such, wanton oil prices competence onslaught to means a new bid. Also, there is a clever probability that wanton oil cost movement focus behind reduce if bearish catalysts manifest and risk hatred takes hold. This would expected conform with a important arise in a SP 500-derived VIX Index. Crude oil and a VIX ‘fear-gauge’ typically say a clever different attribute as indicated by a mostly disastrous association fellow in a draft above.

Keep Reading – How to Trade Crude Oil: Top Oil Trading Strategies Tips

— Written by Rich Dvorak, Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time marketplace insight