IronFX, Fundamental & Technical Market Outlook on WTI Crude Oil - 'April 24th'
WTI Outlook – Oil Prices looking to rocket as global demand is underestimated.
This article is originally referred from IronFX News - Peter Iosif and Angelos Zittis.
Oil producers have been going through a very optimistic period lately, with Oil prices boosting of the top and cash flows seem to be increasingly high in their favor.
OPECS latest comments, regarding oil prices potential, to reach 80 to 100 dollars per barrel creates further excitement for the black gold market.
No impact was noticed on Oil demand from higher prices and the fundamental news support the idea of capacity for even higher prices officials stated.
Traders seem cautious and hesitant towards these statements but the question remains as to what facts these statements are based upon and if true, how fast will they be realized.
The International Oil market has tightened considerably in recent months, as this has been OPECs initial goal since it commenced its Oil productions cuts since last year.
Rumors and fears among market participants are spreading that Oil supply deficit issues are threatening mostly importers.
The impact upon prices is not far away as already price stability has kicked in and Oil is trading very comfortably above 67.50 per barrel.
In the recent months, it was noticed that the EIA has underrated global demand.
According to the economic data analysis, it is obvious that global demand and consumption was much higher than initially expected and accounts for approximately 3 million barrels a day, lesser of true global demand.
Furthermore, Oil prices would not have advanced so drastically without the recent strengthening in demand world-wide.
Saudi Arabia along with its OPEC family and Russia stand by this advancement firmly and are enjoying the fruits of their labor and patience as they have been tested many times in the previous months and were under incredible doubt from outsiders.
One of these outsiders seems to be also, a very well-known person internationally, which happens to be non-other than the President of the United States.
President Donald Trump took his time to express his opinion regarding OPEC saying:
“record amounts of Oil and Oil prices are artificially very high”.
His statement can be interpreted as the US is not in line with the majority of Oil producer’s current activity.
Saudi Arabia’s officials were quick to respond saying there is no such thing as artificial prices opposing Trump’s tweet.
However, the latest Oil Rig count performed by US Baker Hughes on Friday the 20th of April showed that active oil rigs have increased to 820 compared to previous reading of 815.
It could be noteworthy, that the number of active oil rigs has been rising steadily since the beginning of April where the active US oil rigs where counted to be 798.
Growth in the US Oil production has been a great step for technology and innovation and so is viewed positively by the market.
As a conclusion, it was confirmed from OPEC’s side in a previous meeting that their new goal was to stabilize Oil prices at higher grounds.
Traders have a new vision regarding Oil and that general Investments in the Oil Industry could be on the rise in the near future.
Technical Analysis on WTI Crude Oil
Crude Oil is currently trading around $68.74 per barrel.
Strong resistance is found at $69.00 per barrel.
The specific resistance level could be viewed as a key level to be broken upwardly for us to support the case that the commodity has the strength to move higher.
The forecast for the EIA inventories to be released is -2.6M barrels approximately.
This could be interesting for potential purchasers of the black gold and keeping them ready to take charge if the actual forecast is realized.
Oil prices could break the $69.00 (R1) resistance level aiming for the $70.50 (R2) resistance hurdle.
It must be noted that Oil prices have not reached such high levels since 2014 and this event could attract even more attention from traders.
For today we expect Oil prices to move in a sideways manner between (R1) $69.00 resistance level and (S1) support level $67.50
As prices are already boosted a chance of profit locking could be undertaken by traders.
This even may activate the bears to run the commodity south towards the $67.50 (S1) support level.
An even stronger bearish movement could break that support level and Oil could drop further aiming for the $65.50 (S2) Support hurdle.
Original Source: IronFX News - Peter Iosif and Angelos Zittis
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