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Crude Oil Down to SPR Refill Level Support

The politically motivated push to depress oil prices and drain the Strategic Petroleum Reserve created a PRICE LEVEL in the crude oil market which has proven twice to have strong overhead resistance.

The FLIP-SIDE of that SPR DRAIN LEVEL is that SPR-REFILL LEVEL and we are down low enough where it makes sense to strategically refill our lost petroleum reserves.

I strongly advise putting KEY NEWS levels on your charts for future reference so you can use these levels to your advantage.

How much risk do you take on this entry long here?
A good way to assess risk is to use 3 average true ranges (over 11-days or more) to make sure you have a wide-enough stop in any market. If your stop gets hit, you can re-assess and decide to re-enter.

Tim

September 9, 2024 10:25AM EST

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Took a little heat but now working its way back up today.

Doom and gloom in oil prices from oversupply and weak economies (Europe cutting rates 25bp and the Fed likely to cut 25bp).

Tim

September 12, 2024 11:41AM EST

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Rebound continuing. The shorts should consider covering down here. Any buying will drive up prices sharply. It will be a game for after election to seriously re-buy crude oil for the SPR. So I am most optimistic on crude oil after the election.

Tim

September 16, 2024 9:37AM EST

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Still working nicely here for the rebound in Crude Oil from deeply oversold down into the SPR Level. Strategic Petroleum Reserve Support Zone.

$71.11 last +2.06
September 19, 2024 2:18PM EST

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I haven't heard anyone in the media talking about the Strategic Petroleum Reserve or the prospect of refilling it to before the current administration chose to dump oil on the market to suppress the price and take inflation down with it.

Now that prices are this low, the time to take advantage of low prices is when the news is bad, the Fed is cutting 50 bps and China is starting a huge stimulus program to revive its slow economy.

So far, so good.

Tim

9/25/2024 2:22PM EST
Click on "update the chart" to see how it is going.

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The drop to "low-enough" levels down where we would expect to see some Government buy-backs to RE-FILL the SPR (likely not before the election) should cause shorts to cover, which is what is what we have seen, most likely.

The risk/reward gets upside down when the price gets this low and the risk is for a squeeze to the upside in Crude Oil.

The Government decided to dump oil prices to knock down inflation and that date is plotted there clearly on the graph there for you to see. You can also see that the market rallied back up to that level to retest the SPR dumping level.

For those of us chart-watchers and market-watchers, this was about as clear of a signal that anyone could see.

Stay tuned.

Tim

3:52PM EST 10/3/2024

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