Crude has started the new week with gains, as oil prices continue to head higher. On Monday, crude has broken above the $62 level.
Crude has started the new trading week with gains. Currently, West Texas Intermediate crude futures are trading at $62.29, up $0.57 or 0.93%. Brent crude oil futures are trading at $67.48, down $0.69 or 1.04%.
Crude prices have posted gains for four successive weeks, and have jumped an impressive 12.0% in December. With the exception of January, December has been crude’s best performing month.
The Energy Information Administration (EIA) weekly report came out on Friday, and the drawdown caught analysts by surprise, as the drawdown of 5.1 million barrels was much higher than the estimate of -1.1 million. This marked the largest draw of crude since September, and has lifted crude prices in Monday trade. The EIA reports had pointed to a large oversupply of crude, but that trend has shifted lately, with three declines in the past four weeks. If this week’s EIA report also indicates a decline, traders can expect crude prices to move upwards.
Investors are expecting an improvement in some key releases in the final week of the year, which points to stronger economic activity. This could raise investor confidence and push crude prices higher. Later on Monday, Chicago PMI, an important business barometer, is expected to improve to 48.2 in December, compared to 46.3 in November. On Tuesday, CB Consumer Confidence is projected to accelerate to 128.0 in December, compared to 125.5 in November. The manufacturing PMI is also expected to accelerate, with an estimate of 49.0 December, up from 48.1 pts in November.
On the upside, crude has some nearby resistance barriers to contend with. There is a major Fibonacci level at 62.05, followed by resistance at 62.25. Above there is resistance at 63.25. On the downside, the round number of 61.00 is providing support, followed by 59.75.
Kenny is an experienced market analyst, with a focus on fundamental analysis. Kenny has over 15 years of experience across a broad range of markets and assets –forex, indices and commodities.
