Wednesday, May 03, 2017 11:21:58 AM
OIL (CL/WTI): middle term review and forecast
Oil prices continue weakening but the rates are still in the frames of upward trend which began over a year ago. However, the trend is near the completion, and now on the daily chart, you can see signs of the flat trend formation, as the prices from November 2016, keep in the range of 47 - $ 54 per barrel. Support and resistance lines hadn't been broken for all the time. Uncreasing of the drilling rigs in the United States, 15 consecutive week, continue to adversely affect the price of oil. The price of oil reached a minimum level, which for 6 months has been achieved only 2 times.
On the market we can see uncertain situation: on the one hand, OPEC countries are going to continue the agreement “On the reduction of oil production”, and investors believe that it will be done at the next meeting, may 25. On the other hand, the USA abolishes all these efforts with their growth of oil production. Increasing of oil demand will unlikely resolve the issue with the overabundance of oil on the market. Amid this, long-term forecasts of some analysts, in particular experts from Citigroup (NYCE:C) about further increasing the price of oil to $ 65 in the second half of the year, does not seem probable cause oil prices are constantly under the pressure from a number of factors. This week it was the recovery of oil production in Libya, the recession of business activity in China and mentioned before, constant increasing in drilling rigs in the United States. Factors that could unambiguously support the price of oil are not enough, but the situation may change at the end of the month on the results of the OPEC meeting.
At this moment, the entry point to the market we can call the levels of 47.4 and 48.2. The most optimal for the moment we can determine the deals to BUY which can be effective to get the profit on the price correction. MACD, RSI, oscillators partially confirm this. It is most likely that after reaching a new minimum level, the price will move up. Soon investors will focus on the next OPEC meeting, and news from countries-participants of the Agreement “On the reduction of oil production”. It can slightly enhance the price of black gold in the short term.
Oil prices continue weakening but the rates are still in the frames of upward trend which began over a year ago. However, the trend is near the completion, and now on the daily chart, you can see signs of the flat trend formation, as the prices from November 2016, keep in the range of 47 - $ 54 per barrel. Support and resistance lines hadn't been broken for all the time. Uncreasing of the drilling rigs in the United States, 15 consecutive week, continue to adversely affect the price of oil. The price of oil reached a minimum level, which for 6 months has been achieved only 2 times.
On the market we can see uncertain situation: on the one hand, OPEC countries are going to continue the agreement “On the reduction of oil production”, and investors believe that it will be done at the next meeting, may 25. On the other hand, the USA abolishes all these efforts with their growth of oil production. Increasing of oil demand will unlikely resolve the issue with the overabundance of oil on the market. Amid this, long-term forecasts of some analysts, in particular experts from Citigroup (NYCE:C) about further increasing the price of oil to $ 65 in the second half of the year, does not seem probable cause oil prices are constantly under the pressure from a number of factors. This week it was the recovery of oil production in Libya, the recession of business activity in China and mentioned before, constant increasing in drilling rigs in the United States. Factors that could unambiguously support the price of oil are not enough, but the situation may change at the end of the month on the results of the OPEC meeting.
At this moment, the entry point to the market we can call the levels of 47.4 and 48.2. The most optimal for the moment we can determine the deals to BUY which can be effective to get the profit on the price correction. MACD, RSI, oscillators partially confirm this. It is most likely that after reaching a new minimum level, the price will move up. Soon investors will focus on the next OPEC meeting, and news from countries-participants of the Agreement “On the reduction of oil production”. It can slightly enhance the price of black gold in the short term.
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