Rebound strength should determine 2H18 oil outlook...
WTI pattern was in line with our forecast - weak at the beginning, gradual recover in the later of the week. However, rebound trend was weaker than expectation.
Recent WTI performance has broken a few uptrend patterns: i) WTI fell 3 consecutive weeks, the first time since Aug 2017; ii) fell below 100MA, the first time since Sep 2017; iii) fell below medium-term uptrend, which started from Jun 2017 (see the graph). Technical indicators, like RSI and MACD, indicate WTI have bottomed. We expect WTI potential bounce back next week. But strength of rebound will determine 2H18 outlook of WTI.
In the meantime, we initially expect WTI has reached its 2018 peak in May 2018 already, as OPEC will increase its supply.
Recent WTI performance has broken a few uptrend patterns: i) WTI fell 3 consecutive weeks, the first time since Aug 2017; ii) fell below 100MA, the first time since Sep 2017; iii) fell below medium-term uptrend, which started from Jun 2017 (see the graph). Technical indicators, like RSI and MACD, indicate WTI have bottomed. We expect WTI potential bounce back next week. But strength of rebound will determine 2H18 outlook of WTI.
In the meantime, we initially expect WTI has reached its 2018 peak in May 2018 already, as OPEC will increase its supply.