Oil Price May Reverse Short Term Bearishness, Watch For Break Above $70 for Bullish Continuation, Says PrimeXBT Analyst Kim Chua.

Oil has proven once again to the bears that it is too soon to rule it out, putting up a winning streak of 6 days-in-a-row gains to come back from the dead from a low of $61 to a high of $69 in just a week.

With the hurricane season in the US coastal regions and tensions in the middle east, Oil could spring a surprise attack on bears. Currently, Hurricane Ida is tearing through Louisiana and has even knocked out power to New Orleans. Meanwhile, Afghanistan is at the center of much of the news in the Middle East with the Taliban takeover making many people nervous of what is to come from the region.

September 1 meeting of OPEC+ further opens up the possibility of more uncertainty, hence watch for a close above $70 for Crude which could put an end to the downtrend that has plagued oil price for the past two months and set it off to break 2019’s high of $77.

Once $77 gives way, expect between $90 to $100 to follow soon as the shorts get liquidated, says PrimeXBT analyst Kim Chua. A short on Oil has been a very crowded trade since July as most experts have turned bearish due the spread of the COVID Delta Variant.

However, most experts forget that COVID affects primarily demand while a supply shortage can also squeeze the price of Oil upwards, which is what we are experiencing now. 

The event last year where Oil fell into negative territory happened because oil producers were unprepared. They should have learnt their lesson and will likely adjust supply accordingly so that the event will not likely happen again this year.

About Kim Chua, PrimeXBT Market Analyst:

Kim Chua is an institutional trading specialist with a track record of success that extends across leading banks including Deutsche Bank, China Merchants Bank, and more. Chua later launched a hedge fund that consistently achieved triple-digit returns for seven years. Chua is also an educator at heart who developed her own proprietary trading curriculum to pass her knowledge down to a new generation of analysts. Kim Chua actively follows both traditional and cryptocurrency markets closely and is eager to find future investment and trading opportunities as the two vastly different asset classes begin to converge.