Crude Stocks Fall Unexpectedly, Ending Five Week Inventories Build

Trump Criticises OPEC

However, not all players are happy with the oil-producing cartel’s initiative. President Trump, who has consistently criticized OPEC over the last year once again took to Twitter a few days ago to address OPEC saying:

“Oil prices are getting too high. OPEC, please relax and take it easy. World cannot take a price hike – fragile!”.

OPEC Responds

In response to Trump’s comments, Saudi Arabian energy minister Khalid Al-Falih said that OPEC is “taking it easy.” He explained:

“The 25 countries are taking a very slow and measured approach. Just as the second half last year proved, we are interested in market stability first and foremost…We listen to the honorable President, and hear his concern about consumers and assure everybody, whether it’s him or developing country leaders, that we are as focused on the interests of the global economy and consumers around the world as we are focused on the interests of producers.”

Technical Perspective

crude oil

(Click on image to enlarge)

The rise in oil prices saw crude trading up to test the 57.97 level (Feb 2018 low) where price is stalled. The current structure is particularly interesting as we might be seeing the formation of a head and shoulders pattern here. This suggests the potential for another leg lower in oil over the year ahead.

I will be monitoring price in this area if we continue to consolidate. Particularly, I will be looking for selling opportunities in anticipation of this structure developing. Alternatively, a break above the 57.97 level opens the way for a run up to test further structural resistance above at the levels highlighted (61.75 next). That, along with a retest of the broken rising trend line from 2016 highs above also.

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