Oil Talking Points
Oil[1] prices remain bid as fresh updates from the U.S. Department of Energy showed a marked decline in crude inventories, with crude at risk of extending the recent series of higher highs & lows as the bullish momentum appears to be gathering pace.
Oil Prices Risk Larger Rally as Bullish Momentum Gathers Pace
The reaction to the Organization of the Petroleum Exporting Countries’ (OPEC)[2] 174th meeting keeps the near-term outlook for crude tilted to the topside as oil breaks out of a narrow range, and the 9891K contraction in U.S. oil inventories may keep energy prices afloat as it curbs the outlook for supply.
At the same time, the updates showed weekly U.S. field outputs holding steady at 10,900K b/d for the third consecutive week for the period ending June 22, and the recent developments may foster higher oil prices over the near-term especially as OPEC and its allies remain in no rush to restore production.
With that said, recent price action raises the risk for a further advance in oil prices as it continues to carve a series of higher highs & lows, while the Relative Strength Index (RSI) flirts with overbought territory.
Oil Daily Chart
- Topside targets remain on the radar for oil following the breakout[3], with a break/close above the $74.00 (61.8% expansion) handle raising the risk for a run at the Fibonacci overlap around $75.20 (78.6% expansion) to $75.90 (78.6% expansion).
- Next region of interest comes in around $78.30 (100% expansion) to $78.40 (100% expansion), but need to close a close eye on the RSI as it comes up against overbought territory, with a failed attempt
