Summary:
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Weekly crude oil inventories: -1.7M
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Saudi oil min refuses to rule out further OPEC+ action
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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:
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We are confident OPEC+ cut deal are certain enough to bring market into balance unless something unexpected happened
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Market conditions look better now than few weeks ago
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I would not rule out: for further OPEC+ action at some time
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We have to give it time, oil demand is soft in Q1
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Saudi Arabia will lead to bring the market into balance
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We continue to discuss the nuclear 123 agreement with the US
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We want the US to be part and parcel of the kingdom nuclear plants
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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
