UK Oil in Consolidation with Breakout Opportunities
Published On: 16 November 2021, 11:30 AM | Jeraldine Tan, Senior Dealer
UK Oil recently saw a strong retracement after a multi-month rally due to OPEC+ mentioning that they will increase production bit by bit which is putting a cap on oil price.
Upward momentum has dried out as the market is now exhibiting ranging price action with strong moves up and down from support and resistance zones. A short-term trader may seek to benefit from these uni-directional moves by putting limit orders to buy and sell at support and resistance zones.
On a higher timeframe though, the current range will look like a flag pattern where traders can look to trade a breakout and place stops above or below the most recent peak or trough respectively.
Fundamentally speaking, with economies recovering and airlines resuming flights with VTLs, the story for oil demand is getting rosier as refineries need to produce more det fuel, diesel and gasoline which in turn requires more crude oil.
The key will then be whether production increase mainly by US and OPEC+ will outpace demand growth, which at the moment looks unlikely and could be the reason why the market has been indecisive the last few sessions after the initial price drop following the OPEC+ announcement.
This material is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to buy or sell the investment product mentioned. It does not have any regard to your specific investment objectives, financial situation or any of your particular needs. Accordingly, no warranty whatsoever is given and not liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of your acting based on this information.
Investments are subject to investment risks. The risk of loss in leveraged trading can be substantial. You may sustain losses in excess of your initial funds and may be called upon to deposit additional margin funds at short notice. If the required funds are not provided within the prescribed time, your positions may be liquidated. The resulting deficits in your account are subject to penalty charges. The value of investments denominated in foreign currencies may diminish or increase due to changes in the rates of exchange. You should also be aware of the commissions and finance costs involved in trading leveraged products. This product may not be suitable for clients whose investment objective is preservation of capital and/or whose risk tolerance is low. Clients are advised to understand the nature and risks involved in margin trading.
You may wish to obtain advice from a qualified financial adviser, pursuant to a separate engagement, before making a commitment to purchase any of the investment products mentioned herein. In the event that you choose not to obtain advice from a qualifies financial adviser, you should assess and consider whether the investment product is suitable for you before proceeding to invest and we do not offer any advice in this regard unless mandated to do so by way of a separate engagement. You are advised to read the trading account Terms & Conditions and Risk Disclosure Statement (available online at www.poems.com.sg) before trading in this product.
Any CFD offered is not approved or endorsed by the issuer or originator of the underlying securities and the issuer or originator is not privy to the CFD contract. This advertisement has not been reviewed by the Monetary Authority of Singapore.
POEMS Mobile is required for this action. Please get it from App Store.
Demo Account Setup
Demo Account Setup
Step 2 of 2 – Account Verification
Thank you for signing up for POEMS MT5 CFD demo trading account!