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Crude Oil Futures – Technical Fundamental Divergence

Successful oil futures trading not only requires the ability to blend technical analysis with an understanding of the underlying oil market fundamentals but also the ability to rise above the noise which is generated in a financial sector which can at the mercy of both market and geo political forces.  Oil trading is as much about politics and human nature as the price action on oil charts.

Recently technical and fundamental factors have appears to deviate in oil futures trading as crude futures pushed higher last week with the newly spot Oct contract teasing 10 month highs.  The primary source of support for oil futures has come in once again from a combination of a weakening dollar and associated gains in equities.   All this while ignoring current oil market fundamentals which includes a glut of supply, a growing lack of storage and an uncertain economic recovery – indeed some analysts, including Nouriel Rubini, are now saying there is an increased risk from a double dip rcession which does not bode well for oil bulls in the medium term.   However, so long as oil traders and investors continue to view the oil market as a valued asset in its own right and a hedge against a further weakening of the US Dollar oil futures trading will continue their upward trajectory.

Trading oil futures is difficult at the best of times which is why it is so important to use an oil broker who can offer the widest possible oil market experience, tight spreads and low margins.  In addition the best oil brokers will also offer an outstanding trading platform such as the metatrader4, one the most respected and trusted retail platforms.  For more information and to download an online oil trading account click any of the highlighted links.   Moreover, if you want a daily technical analysis for the WTI oil contract just visit our sister site daily oil prices –  Good luck and good trading.