A 10% high-low range - the highest range since November 2020 - is compelling enough to get scalpers to trade around the clock, so there would be some tired heads today. After hitting $102.19 crude prices staged an incredible reversal, although support has been seen into the 20-day MA once again. The wash-up from the incredible movement is that client positioning is nuanced, with 53% of open exposures held long and with many positioned for a renewed tilt at $100 and a close above the rising trend resistance (drawn from the March 2021 lows).
It promises to be a big weekend for traders with the prospect for gapping (higher or lower) very much in play for Monday’s open – while there have been headlines on various government (including the Biden Administration) looking to release petroleum reserves, the sheer degree of shortages means any increased supply here will have a limited effect on Crude.
We also have the OPEC meeting on Wednesday (2 March), which could be a volatility event for traders to put on their radar - I think OPEC+ wont deviate from the agreed output increase of 400k b/pd and essentially turn a blind eye to the tensions. However, the risk is they do increase output by more than 400k, which could cause a sudden retreat in crude. For now, though, it feels like the Crude bulls are in control and the path of least resistance is for higher levels.