Oil started the week beaten because of COVID-19 fears as it spread across different countries with increasing number of cases.
Sell off started last week and today is the 5th straight day of selling. It currently sits at support and as of writing, the market seems to be holding it well.
In 15 more minutes, US crude inventories will be released. It would most likely be bearish for oil as usual but from this point on, where does oil plan to go?
We can only speculate. The pandemic fear will still be a headwind for oil but do take note that when oil hit 53.5 a couple of weeks back, OPEC wanted to hold an emergency meeting.
Now that oil is back at 53.5 and with the scheduled meeting just 5 trading days away, I believe the viable approach is to trade towards the bias of the meeting. OPEC will most likely decide to extend supply cuts and perhaps a deeper one. This is a bullish scenario.
My bias now is to go long and sell on March 5.
The big risk is what the COVID-19 pandemic can do between now and March 5. If you want to maintain a bearish bias on Oil, it is but prudent to stay away from the coming technical rally and just take a short position after March 5 or at certain resistance levels.