Crude Rallies to a 10-Week High

Crude has climbed 5.5% this week, as crude inventory reports and a key OPEC meeting have boosted crude prices.
Kenny Fisher
Crude Oil daily chart, February 25, 2019

Crude oil prices continue to push higher and are pressing on the $59 level. In the North American session, West Texas Intermediate crude oil futures are trading at $58.75, up $0.44 or 0.76%. Brent crude oil futures are trading at $63.58, up $0.60 or 0.95%.

Crude Soars on EIA Report, OPEC

Crude oil jumped 3.6% on Wednesday, after an unexpectedly strong crude inventory decline. The Energy Information Administration (EIA) weekly report estimated a drawdown of 4.9 million, which was much larger than the estimate of a 1.6 million decline. This figure followed the American Petroleum Institute (API) estimate a decline of 3.72 million barrels, higher than the forecast of a drawdown of 1.79 million. This marked the sharpest drawdown since September.

Aside from this week’s crude inventory reports, oil prices were also supported ahead of a key OPEC meeting on December 5-6. OPEC members are discussing reducing output, in order to combat an expected oversupply of crude in the first half of 2020. OPEC members are technically bound by a production cut of 1.2 million barrels per day, but compliance with production cuts has historically been problematic. If OPEC fails to implement a deeper cut, crude prices could fall as low as $40 per barrel.

Technical Analysis

WTI/USD continues to break above resistance lines, as crude continues to rally. The pair is testing resistance at 58.50 and is also putting pressure on the next resistance line at 59.25. On the downside, 57.50 has switched to a support role.

I continue to monitor the 50-EMA and 200-EMA lines, which are in close proximity and could converge shortly. Currently, the 200-EMA is at 57.02 and the 50-EMA is at 56.46. If the 50-EMA breaks above the 200-EMA line, this would be a bullish signal (“golden cross”).

WTI/USD 1-Day Chart
Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.