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Oil surges on Saudi comments after dip on inventories

17:06 9 January 2019

Summary:

  • Weekly crude oil inventories: -1.7M

  • Saudi oil min refuses to rule out further OPEC+ action

  • Oil and Oil.WTI both up 4%+ surge near 1-month high

 

There’s been a strong push higher in the crude markets in the past hour with both Oil and Oil.WTI recovering from a dip after the latest inventory numbers, largely thanks to some upbeat rhetoric from the Saudi Oil minister. Selected comments are as follows:

 
  • We are confident OPEC+ cut deal are certain enough to bring market into balance unless something unexpected happened

  • Market conditions look better now than few weeks ago

  • I would not rule out: for further OPEC+ action at some time

  • We have to give it time, oil demand is soft in Q1

  • Saudi Arabia will lead to bring the market into balance

  • We continue to discuss the nuclear 123 agreement with the US

  • We want the US to be part and parcel of the kingdom nuclear plants

  • US is key provider for nuclear technology

 

Falih’s comments have driven the markets up to their highest level in almost a month with Oil.WTI higher by more than 4% no the day at the time of writing.

 

Today’s gains mean that Oil.WTI has bounced around $10 since making a low of 42.60 just after Christmas and the rally has seen the 8 and 21 EMA converge. These trend identifiers could be close to printing a bullish cross which may be seen to signal a change in the longer term trend after a prolonged slump. Overhead resistance could be found in the region around 54.75 and given the neatness of the market the last time it was around these levels it is tempting to look for a second shoulder in an inverse head and shoulders set up to begin to form. 54.75 could be seen as the neckline in this potential setup which could signal a targeted move much higher.

Oil.WTI has extended its recent recovery and could be carving out a longer term bottom. It’s still got some way to go yet but it is tempting to look for a second shoulder to form in a possible inverse head and shoulders which, if triggered, would target a sizable move higher. Source: xStation

 

This content has been created by X-Trade Brokers Dom Maklerski S.A. This service is provided by X-Trade Brokers Dom Maklerski S.A. (X-Trade Brokers Brokerage House joint-stock company), with its registered office in Warsaw, at Ogrodowa 58, 00-876 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. X-Trade Brokers Dom Maklerski S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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