Fundamentally, crude oil (NYMEX:CLF15) has fallen to a 5-year low as Saudi Arabia give China a "special deal" on prices and the U.S. dollar index futures has rallied over the last several weeks. OPEC doesn't care either as evidenced by their last meeting where they vowed to keep production the same amid falling prices. It's a good reason for them to pump more crude oil now in order to sell as much as they can to make up the lost revenue by falling prices. It's like the 12 nations are at war with each other to see who can produce the most I think.
This will inevitably cause even lower prices I believe. OPEC will continue to glut the market is my opinion. I never accused OPEC of being the smartest knife in the drawer. In other words, in my view they are a few sandwiches shy of a picnic, you know the lights are on, but nobody is home. OPEC is like well...a few fries short of a Happy Meal or a few peas short of a casserole. Anyway, I like to say I may not be the sharpest tack in the box, but if you stick your finger in there you will get poked. This is how and why I can bring this awesome commentary on the crude oil market to the masses. Okay, okay, time to get serious.
Technically, on the chart below I have placed my favorite technical indicators. They are the 9-day Simple Moving Average (SMA, red line), the 20-day SMA (green line) and the 50-day SMA (blue line). I have also added the Bollinger Bands (yellow lines) and Candlesticks (red and green bars)--each bar represents one day of trading on these daily charts.
Daily January crude oil chart