Oil prices are holding steady and are recovering off their lows early Thursday as the U.S. dollar is relieving some of its downward pressure with a current strong inverse correlation on a trending basis (90 day) with oil (Brent) of -0.71. The U.S. dollar has rallied over the course of the last couple sessions amidst a resurgence in coronavirus cases, which had many turning to safer assets. Demand prospects continue to be weak as renewed outbreak concerns in Europe continue to undermine the case for a steadfast recovery in global growth. Minimal support may have been garnered from a decline in weekly inventories, which more than likely may have been a result of productions shutdowns in the Gulf over the course of the last couple weeks. Regarding the supply side, Libya is expected to ramp up production likely boosting output to 260k bpd by next week. Oil volatility (OVX) has now broken out above trend (~39.50) with WTI now bearish trend with today’s range seen between 36.43 – 40.90

Crude Oil Nov ’20 Daily Chart
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Alexander Turro

Senior Market Strategist
Alex began his career with an IB at the Chicago Board of Trade after graduating with a BA/BS from Indiana University. He then went on to work for a proprietary trading software company before joining RJO Futures as a Market Strategist.
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