The event was heavily priced in
Don’t be surprised to see oil start to regain some upward pull by the end of the day. I mean the main risk is out and what was a threat from last week is over, and with little reaction seen in oil prices.
The market has had plenty of time to digest the SPR release and this is supposedly what has weighed on prices over the past couple of weeks, although I attribute some of that to technical exhaustion – somehow. thing that I constantly mentioned.
Still, the headlines could reverberate a bit more as the market will be anxious to see how OPEC + reacts now that the cat is finally out of the bag.
I doubt we will see an overreaction from the
cartel block, but inaction may make the market a little nervous about the release of SPR that will hit the market in December.
But still, technical indications suggest that Oil may put up a modest defense at the 100-day moving average (purple line) at $ 74.35 and possibly at the 50.0 retracement level of the swing movement. August to October highest at $ 73.58.
Despite the news of the SPR release, which involves a number of countries, I would say the oil market will remain quite tight until next year and if anything else it could see OPEC + pull back on action to flood the market with more oil. The latter is more important in my opinion, so we’ll have to see how that plays out as well.
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