Oil Worth Approaches February 2020 Excessive Following OPEC Assembly

Oil Worth Speaking Factors

The worth of oil extends the advance following the Group of the Petroleum Exporting International locations (OPEC) assembly amid the continuing slack in US output, and looming developments within the Relative Energy Index (RSI) could present the bullish momentum gathering tempo because the indicator flirts with overbought territory.

Oil Worth Approaches February 2020 Excessive Following OPEC Assembly

The worth of oil trades to a recent weekly excessive ($51.28) because it carves a sequence of upper highs and lows, and crude could proceed to method the February 2020 excessive ($54.66) as OPEC and its allies look like on observe to control the power market all through 2021.

Following the 13th OPEC and non-OPEC Ministerial Assembly (ONOMM), Saudi Arabia introduced plans to cut back oil manufacturing by 1 million b/d in February and March, with Vitality Minister Prince Abdulaziz bin Salmangoing onto say that the group “will take all obligatory actions” throughout an interview with Bloomberg Information because the adjustment is about to run out in April.

The continuing efforts by OPEC and its allies ought to assist to maintain oil costs afloat as latest information prints popping out of the US revealed a 8010Ok decline in crude inventories, with oil output nonetheless sitting at its lowest degree since 2018.

The replace from the Vitality Data Vitality (EIA) confirmed area manufacturing holding regular at 11,000Ok for the fourth consecutive week, and the continuing slack in US output could preserve crude costs afloat although OPEC+ plans to “steadily return 2 mb/d to the market, with the tempo being decided in response to market situations.”

With that mentioned, the value of oil could proceed to method the February 2020 excessive ($54.66) because it extends the sequence of upper highs and lows from earlier this week, and looming developments within the Relative Energy Index (RSI) could present the bullish momentum gathering tempo because the indicator flirts with overbought territory.

Oil Worth Each day Chart

Supply: Buying and selling View

• Have in mind, crude broke out of the vary certain value motion from the third quarter of 2020 following the failed try to shut beneath the Fibonacci overlap round $34.80 (61.8% growth) to $35.90 (50% retracement), and the value of oil could proceed to retrace the decline from the beginning of 2020 because it clears the March excessive ($48.66).
• The value of oil could proceed to method the February 2020 excessive ($54.66) because it carves a sequence of upper highs and lows, and theRelative Energy Index (RSI) could present the bullish momentum gathering tempo if the indicator breaks above 70 and pushes into overbought territory just like the habits seen in December.
• The shut above the $49.20 (50% growth) area brings the Fibonacci overlap round $52.90 (78.6% retracement) to $53.30 (38.2% growth) on the radar although the value of oil not tracks the upward development carried over from November, with the February 2020 excessive ($54.66) up subsequent.

— Written by David Tune, Forex Strategist

Observe me on Twitter at @DavidJSong