WTI Crude Oil Daily Analysis – September 26, 2017

Crude oil prices edged higher on Monday despite investors expectations that producers will extend production cuts sooner. WTI crude oil dropped 0.38% to trade at $52.02 as of 8:00 GMT.

Members of the OPEC and other major producers met in Vienna on Friday and assured to rethink the idea of extending the production cut agreement beyond March 2018.

Russian Energy Minister Alexander Novak said: “I believe that January is the earliest date when we can actually, credibly speak about the state of the market,” whereas, other ministers suggested a decision could come this year.

According to Gene McGillian, director of market research at Tradition Energy in New York: “It’s [the rally in oil prices] all driven by the idea that the production cut is starting to work and the rebalance is underway,”

The American Petroleum Institute (API) is due to release its weekly oil data later on today.

Technical Outlook

Short Term View

Crude oil 4H chart has formed the “Rising Wedge Pattern”. An upside movement is likely to hit $53.67 which would be the highest since April. Support holds at $51 and a break below the support line could lead towards $49-$50 level.

Medium Term

The crude oil trades in lower highs and lower lows form. Since Feb 2017, it’s the first-time crude oil prices break through lower high which is an indication of trend reversal from negative to positive towards $53.67-$55.

On the daily chart, the 50-day moving average crossed over the 100-day moving average at $47.40, indicating bullish momentum.