Daily Alert – Tuesday 28th September 2021: Oil extends bull run to day six

Mark NugentSept 2021

Daily Alert – Tuesday 28th September 2021: Oil extends bull run to day six

Ever higher gas prices are forcing electricity producers to focus as much as possible on oil-fired power stations to contain costs. WTI is now on a six-day bull run and Brent has hit USD80/bbl for the first time since October 2018.

I went long on WTI last night, despite the price approaching resistance. I felt, and feel, that the extra demand for electricity production will overwhelm any technical chart factors. So far so good. WTI is up almost one dollar and has breached resistance.

Of course, another way the rising oil price, coupled with the negative risk sentiment (as reflected in equity movements and the dropping JPY) would be to trade CADJPY (CAD getting a boost from the rising oil price as oil is a major export for Canada). Trading oil is a “purer” play and as such is less risky. Trading CADJPY long is riskier, but you get the chance of a greater profit as the JPY helps the trade move. As always, it’s a risk/reward balance.

There is little on the calendar until a slew of GDP and inflation readings on Thursday and Friday.

I’ll be back tomorrow.

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