Medium term
Trade view / 02 September 2016 at 11:34 GMT

#SaxoStrats: Oil to recover some of its recent aggressive loss

Head of Commodity Strategy / Saxo Bank

Brent crude oil is trading higher today following a near 10% selloff earlier in the week. Speculative long positions have now been scaled back and with the return of verbal intervention, this time from Russia, we could see the market recover at least some of what was lost. 

The selloff was halted once the market had retraced 61.8% of the August rally. With the renewed and potentially more potent discussion about a production freeze emerging we now look for a response to the upside with the target being the 38.2% retracement of the latest selloff.


Entry: Buy LCOX6 or OILUKNOV16 at market (last at $46/b)

Stop: $45.20 (relatively tight with 1 ATR currently at $1.4/b)

Target: $47.60

Time horizon: 1 to 2 weeks

Key risks: US jobs report leading to a stronger dollar, US rig count and inventory reports .

Seasonality: From a seasonal perspective oil has fallen every September in the last five years .


Source: Saxo Bank

Long-term view:
Source: Saxo Bank 

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail