Today Crude Oil futures reached an intraday high not seen since October 2015. The high is backed by a number of factors including continuous OPEC led production cuts, low levels of U.S. crude and a dollar in decline.
At the end of 2016, OPEC aimed to reduce crude production by 1.2 million barrels per day, or 1% of global output, in effort to pry the commodity out of its nearly 2-year slump. The production curb efforts are gaining footing and moving the market into less oversaturated territory.
According to the Energy Information Administration, U.S. crude inventories dropped for the 10th week in a row to 411 million barrels. Exports simultaneously increased by 162 barrels/day.
Because crude is priced against the U.S. dollar, a weaker dollar could spike international buying interest. With the dollar on a steady decline after U.S. Treasure Secretary Mnuchin stating a weaker dollar benefits the U.S., crude oil rallied.
The above chart, created for free using the award winning NinjaTrader platform, showcases the March 2018 Crude Oil Futures contract since the inception of its bullish run at the end of June 2017. Included with the daily price action is a Bollinger Band indicator, which are typically used to identify potential overbought and oversold market conditions. When price action breaches the upper bands, a market is generally considered “overbought” & vice versa as price action reaches the lower bands. Despite what some technical analysis data portrays, the fundamentals may be on the side of a continued bullish run.
The Bollinger Band indicator is just one of nearly 100 free indicators included with every download of NinjaTrader. Get started charting Crude Oil and other futures & forex instruments for FREE – download NinjaTrader today!