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Charts suggest a major buy opportunity for oil is coming

by News Desk
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CNBC’s Jim Cramer said Tuesday that investors should be ready to buy crude next month, based on Carley Garner’s chart analysis.

“She thinks there could be a final washout this week, possibly starting in early December, which could bring oil down to the high $70s, or even the mid-$60s. When we get there, she’s the mother of all buying opportunities,” he said.

West Texas Intermediate Crude futures, the benchmark for U.S. oil, this week The Wall Street Journal reported OPEC members were considering increasing production by 500,000 barrels per day ahead of OPEC+’s December meeting on Monday. Saudi Arabia later denied report.news about Covid-related deaths in China Oil volatility also increased over the weekend.

WTI crude futures settled at $80.95 a barrel on Tuesday.

To illustrate Garner’s analysis, Cramer first examined a chart of seasonal patterns in WTI crude oil.

The graph shows how oil tends to behave at different times of the year, and Cramer says Thanksgiving week tends to be ugly for oil. “Historically, some of the most devastating oil declines occurred on or around Thanksgiving.

The chart shows crude oil futures fell $10 on the Friday after Thanksgiving 2021. Crude oil fell 10% during Thanksgiving week in 2018 and nearly 14% in 2014, he added.

Garner’s explanation for why Thanksgiving tends to bring such pain to oil is that the week included the last trading day of oil futures in December, and that it would be in late November or early December. Because there are always OPEC meetings.

“Take into account the fact that holiday weeks tend to have very low trading volumes. [as] A lot needs to be done to move commodities, or, frankly, stocks, in these brighter times,” Cramer said.

For a detailed analysis, see Cramer’s full explanation below.

Watch Jim Cramer analyze Carley Garner's new chart analysis

Jim Cramer’s Investment Guide

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