 Good morning, and welcome to the chart of the week video with me David Madden Today's date is Friday the 11th of December 2020 and the time has just gone 1130 GMT and this week's chart of the week is bring crude oil the cash market and This is a wider term view of the of the energy market We can see here that it after had a colossal Sell-off because of the COVID-19 crisis and a bit of a bit of a price roll between Saudi Arabia and Russia and a brutal decline into April but since then has been bouncing back and recently It's been in a strong upward trend. In fact yesterday It traded north of $50 per barrel the first time since March. So we've cooled a little from the recent nine-month highs Why is the oil market been been driving higher? Well in the last few week On the last few weeks and months has been a few developments On one hand the economic rebound in China has been pretty clear and pretty evident particularly in the manufacturing sector China's a big importer of commodities including oil There's also been hopes in the last few weeks in relation to a vaccine For the COVID-19 crisis the idea being that if the global economy improves If there's a vaccine that should improve the global economy and therefore worldwide demand should increase And more recently OPEC plus the group of all producing nations Recently decided that they would roll back on the current production cuts that they have in place, but the rollback Wasn't as severe as initially intended the idea was to you know undo Supply cuts by two million barrels But in fact the only only kind of roll it rolled it back by five from a thousand barrels per day You know this this these are the new production plans that will come into effect in January So they're effectively keeping the pressure on output. Therefore That has helped the price. So therefore we can see See quite clearly since early November has been a fairly strong and aggressive upward trend We've retreated from the highs of yesterday, which was you know up towards 51 dollars a barrel A bit of a pullback isn't really a surprise after you've had a new nine-month high But the train this live very much to the upside So if you press on higher from here and if you retake 50 bucks a barrel We could be looking at retesting this area here the highs of early March And they came into play in a 54 dollars and 28 cents And if you go beyond that we could be looking at back up towards the highs of mid-February Just as the kind of COVID-19 crisis was kicking off and that comes into play Just just in around again at $60 per barrel area Now if you take a look at the price action Where could we potentially see support if you drift lower from here? Well, we could find support from the little 48 region Not too long ago that area acted as a support kind of relief for the next leg higher And a move below that could take us back down toward this is zone here down around 46 dollars and 81 cents And even if you go below that we could head back down towards the 45 dollars We can see that that general area acted briefly at resistance in November It acts as fairly wide area of consolidation Back in August as well as keeping that for 45 bucks And even if you go below 45 bucks We'd probably probably be still being the upper trend given of how much is rallied between Early November and now And if you do go below 45 keep an eye for this area here where the yellow line here One of the moving average converges with the fifth of the moving average This this blue line here that comes into play in around In both in around kind of 40 43 dollars and 72 cents 43 dollars and 42 cents There they're about now you can see that in the last few weeks and months Both of those metrics at very different occasions have acted as both support and resistance So keep an eye for that zone As it might act as support in the near term Now if you are going to be trading brain crude oil, it's worth your while keeping an eye what's going on on WTI West Texas Intermediate Delft theory states that that the averages must confirm each other And what that essentially means is if a mark if a market is moving in a certain direction Similar markets are likely to be moving in a to be moving in a similar direction So brain crude oil is in a solid upper trend and as we can see here WTI is in a similar position Yesterday WTI also racked up a new nine month high And it's a touch lower today. So if you see WTI retesting its early march highs We could see something similar on brain crude oil Thank you for listening. That's all from this video. Have a good trading week and good luck