$CL Archives - FaithMightFX

The global lockdown made price of Crude Oil fall to the negative region. The price of Crude Oil began to increase when a gradual ease of the lockdown began last year. The highest level crude oil price reached in 2021 was at 67.83. Before 2021, this level was reached in October 2018, which was a year before the coronavirus was declared a pandemic. Prior to the pandemic, the price of crude oil ranged between $42.73 and $66.76, until a dip occurred as a result of the lockdown. The current price of crude is at 61.00 as price has been ranging from 57.28 and 67.83 in the last few weeks. Few countries like Italy is back to lockdown due to spike in Covid-19 cases. Also, some cities in India are not left out. Hopes are currently being dashed due to increase in Covid-19 cases, despite vaccines are being administered across the world.

There are 4 instances of RSI showing price being overbought in the last two years. This year has been bullish with the $CL price, which opened at 47.15 to reach the highest level at $67.83. Towards the end of last month, price has been able to move to the lower region of the the Bollinger bands, which might be an indication of a reversal. If Covid-19 cases continue to rise across the world, the price of $CL might be lowered towards the support level at $35.85.

Innovations coming up daily have brought about decline in demand for crude oil across the world generally. We are now entering the most active months of the hurricane season in the Atlantic Ocean. Even though weather scientists are forecasting that the 2018 hurricane season will not be nearly as active as 2017 and 2016, the Hurricane Gordon is forecasted to be heavy in October.

It has come to my understanding that not all hurricanes enter the Gulf of Mexico, but when they do, many oil companies will take precautions and shut down their offshore production and evacuate personnel before the hurricane hits. A trace of Hurricane Gordon, which came through the Gulf of Mexico on Tuesday and Wednesday, forced producers to shut down 9.23% of oil production in the Gulf and 9.06% of natural gas production from the northern Gulf of Mexico.

Over 45% of the total U.S. refining capacity is located in the Gulf. Hurricanes and other storms can cause flooding, sometimes severe, that has caused refineries to shut down. In 2017, the largest refinery in the United States, Saudi Aramco-owned Motiva, shut down for 2 weeks after Hurricane Harvey causing severe flooding in Port Arthur, Texas. Other refineries only closed for a few days during and after Hurricane Harvey.

Meanwhile, there is already a breakout downward both with the RSI and Ichimoku. It is presently around $69 to a barrel and might find a new support at $65. For the most part of August, 2018, the price of crude oil was on the rise. Sellers might become active due to these indicators.

Sources: Hurricane storm threat (Investing.com)

Crude Oil Price Drops (CNBC.com)

Tag: $CL

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