Crude oil is steady at the $61.00 level. Investors are keeping a close eye on the GDP release (15:30 GMT), which is a market-mover that could trigger some volatility in crude before the end of the week.
After posting incremental gains throughout the week, crude oil has taken a pause on Friday. Currently, West Texas Intermediate crude futures are trading at $61.00, down $0.10 or 0.17%. Brent crude oil futures are trading at $66.32, down $0.24 or 0.36%.
Crude prices have jumped an impressive 10.00% so far this month, and the short-term outlook is positive for crude. The U.S. and China are the world’s two largest consumers of oil, and the limited trade agreement that the two sides have hammered out should reduce the bitter trade war and promote stronger growth, as well as higher demand for oil. As well, OPEC members have agreed to further production cuts, although enforcement of production agreements has been spotty in the past. Crude has gained 2 percent this week, buoyed by solid U.S. economic data and a bullish EIA crude inventory report, which showed a drawdown of 1.1 million barrels last week.
Crude has been treading water on Friday, but that could change later in the day, with the release of the Final GDP report for the third quarter. GDP is expected to post a respectable gain of 2.1%, which would confirm the second-estimate reading. The U.S. economy is in good shape and a better than expected GDP reading could translate into higher crude prices.
Crude has been on an uptrend for the past week and continues to test the 61.00 line. Above, the line of 61.50 is vulnerable. The next resistance line is at 62.25.
On the downside, 58.50 is providing support. Below, there is support at 57.50. There was a significant development earlier in the week, the 50-EMA crossed above the 200-EMA, which is a bullish sign for crude.
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.
