Crude Oil on Wednesday 12th July 2017, CrudeOil July futures prices Up by (37) pts (1.27%) closed at 2949, trading range between 2910 – 3000. Crude oil for August delivery on the New York Mercantile Exchange settled at $45.49 a barrel.
Oil prices dipped early on Thursday as producer club OPEC said it expected demand for its crude to decline next year as rivals pump more, pointing to a market surplus in 2018 despite efforts to tighten the market.
The Organization of the Petroleum Exporting Countries (OPEC) said late on Wednesday that the world would need 32.20 million barrels per day (bpd) of crude from its members next year, down 60,000 bpd from this year, as consumers have increasing choice of supplies from outside OPEC.
Despite the ongoing supply overhang, there are signs of a gradual reduction of the glut.
In the United States, crude oil inventories last week dropped the most in 10 months.
Crude oil prices are seen consolidating in resistance place which reflects the indecision towards further direction. However, there was a second attempt to touch resistance at $46.50(3000). When the inventory report was released this week and the previous week it could be noticed that it is difficult to break strong hurdle resistance place.
For the Last couple of days Crude oil prices reacted and the previous resistance became support at $44.90(2890) and next strong resistance will be $46.50.(3000)
There was enough time to break low but it was holding nearby support area at $45.40(2930) levels. So, I believe crude prices are nearing to touch the support line and then pullback to break higher and high because crude oil chart has taken the formation of “Round and Bottom” pattern. This pattern indicates bullish momentum. Once it breaks neckline at $46.11then the next rally is expected to reach towards $47-48(3020-3100) level.
The stop loss is placed below the neckline of the pattern at $44.90(2890).If the price trades below this point, the probabilities of the pattern working out have decreased and it’s not necessary to hang around any longer in the market.
The profit target is measured by taking the height of the actual pattern and extending that distance up from the neckline.