Following my analysis of oil earlier this week, the most significant change has been in the move lower for the volume point of control on the daily chart, which reflects the increased transacted volumes at this price level, and the increasing likelihood of further price congestion in this region. The VPOC itself (the yellow line) has now settled at $45.60 per barrel defining the new point of price agreement. The other key level at present is the high volume node which sits in the $43.80 per barrel region, which to date has been tested and held three times this week and most recently in today’s price action.
From a fundamental perspective today’s oil inventories revealed a build in supply once again with the forecast of 0.9m bbls comfortably exceeded by 1.7m bbls. However, despite this, oil prices only moved marginally lower, and off the highs of the session, adding further to the prospect of a longer term accumulation phase developing with the VPOC at the centre.
By Anna Coulling – charts from Quantum Trading and Ninjatrader