Oil climbed, and broke through the neckline of the reverse head and shoulders pattern that has been in play for the past few months. The growth was due to supply cuts and reduced output from OPEC countries. Russia has also agreed to participate in the cutbacks. Saudia Arabia will be repairing a damaged offshore field, and this will decrease supply and increase the price of oil in the week to come. In total oil rose 4.2% the past week. Gains are being stifled by a few factors as well. US inventories are rising, the global slowdown is decreasing demand, and US output is at a record high. To counterbalance this Chinese imports of oil are rising by about 4.8% each quarter for the past three quarters.
Starting on the week of February 18th China-US trade talks will continue in Washington as the leaders of both nations will sit down to reach an agreement before March 1st. Also the US may put sanctions on Venezuelan exports and further decrease world supply.
So long as WTI stays above 54.00 we see a bullish play in motion. If and when oil breaks through the Fibonacci resistance level of 38.2% at the price of 55.63 we will see the biggest spike up. The next level of resistance is the 200-EMA. The first strong target of the bullish movement is 57.34 and the next target is 59.00.
Starting on the week of February 18th China-US trade talks will continue in Washington as the leaders of both nations will sit down to reach an agreement before March 1st. Also the US may put sanctions on Venezuelan exports and further decrease world supply.
So long as WTI stays above 54.00 we see a bullish play in motion. If and when oil breaks through the Fibonacci resistance level of 38.2% at the price of 55.63 we will see the biggest spike up. The next level of resistance is the 200-EMA. The first strong target of the bullish movement is 57.34 and the next target is 59.00.
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