Oil Prices Surge on Bullish News

The oil prices got a boost on Friday after lying low for quite some time on the back some bullish news for oil prices on many fronts. The oil prices had been trading a bit subdued over the course of last week as the dollar regaining its strength and also the global risks seem to be weighing on the oil prices. This saw the price dip below the $47 mark and threaten to make a much larger correction. But we have always been advising to be long on the oil contracts and this received a boost on Friday as it rose by more than 2% to end the week. Over the past couple of weeks, the oil inventory in the US has been falling but the oil prices had shown little reaction to that news. Also, the dollar is also choppy and mainly on the backfoot but again, that seemed to have little impact on the oil prices.

Oil Prices Move Up On Falling Rig Count

The trigger for the large move up came in the form of the oil rig count which showed a dip for the first time in several months. Though the dip in the count was not very huge, it mainly acted as a trigger to the string of all the bullish news and this pushed the oil prices higher through the $47 region and now it trades comfortably above the $48.5 region and looks very bullish once again. We expect a move towards the $50 region and beyond in the short term and we do expect the prices to move towards the $55 region in the medium term.

Gold prices were also very active during the course of Friday as the prices rose by more than $15 and then retraced the entire move to basically close the day on Friday, where it started. The prices moved from the 1285 region and went as far high as $1300 and for a brief while. it looked as though the prices had broken an important resistance region but a lot of selling came through in that region which then pushed back the prices lower and it ended the day just below the 1285 mark. This kind of choppy action has set a confusing picture on what the short term trend is likely to be and it is a question of waiting and watching as far as the gold prices are concerned.

Silver prices also followed similar price action as that of gold as it went higher during the first half of the day, only to correct later in the day and end the day where it began.