The Oil “Bulls” Still Have Strengths

This week, the oil market will try to get higher. At least, the fundamental background allows counting on that. On Tuesday, Brent costs 57.85 USD; the instrument is slowly growing. WTI crude oil is growing faster, its price is 52.27 USD (+0.73%) at time of writing.

The latest Baker Hughes Rig Count report published last Friday showed that the indicator has been falling for the third consecutive week. On October 20th, the indicator lost 15 units and was 913. Oil Rigs decreased by 7. On YoY, the indicator is still increasing (+360 units).

News from the OPEC technical committee, which had a meeting earlier, also provides support to oil ”bulls”. The committee concluded that the member countries of the oil extraction suspension agreement satisfied the agreement by 120% in September. By the way, in August, this number was 116% and investors were very positive in their response to another record-breaking reading.

Meanwhile, the excess of the oil supply in the world, according to OPEC, is still very significant. This number is 159B barrels for the OPEC countries, but it is slowly decreasing and bringing hope that the oil market may strike a balance soon.

The meeting at the end of November in Vienna will be very important for OPEC. Investors believe that the organization will inform them about possible ways to extent of change the current agreement between the petroleum exporting countries. OPEC has no plan “B”, and largest member countries are sure that the agreement has to be extended.

If we take a look at the weekly charts of Brent and WTI, we can see that they are pretty the same. However, the key aspect of the Brent chart is that the instrument may break its multi-months’ high any confirm investors’ intentions to push the price towards the target at 70.00.

On the daily charts, both instruments are trading in a quite similar way, only the short-term upside targets are different. For Brent, it’s 62.00, for WTI – 55.73.

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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.