Crude Oil recap for 21.05.2018
Oil Yesterday settled at a fresh three-year high as the International Energy Agency opened discussions with major oil - producing nations about collapsing output from Venezuela, home to the world's biggest petroleum reserves.
The crisis in Venezuela deepened after President Maduro won the elections as they were widely-criticized and they were followed by a U.S. prohibition on buying debts owned to the government or state-owned oil company PDSVA.
WTI opened at $71.40, and at first it started going down making a low at $71.23. After the news came around that more sanctions will strike Venezula that overshadowed Oil output, the price started to make gains quick as the price reached a high of $72.53 and closed at $72.52 for a barrel. In my previous notes I've mentioned the possible move up as it surpassed my predicted level of $72.24. Now support remains $72.38 on the 15M chart and for now it looks that the sky is the limit as the crisis deepens. $73 would be the next appropriate target to watch for the price to claim.
"Venezuela is the major risk for the oil markets for the next weeks or months to come," IEA Executive Director Fatih Birol said in a Bloomberg TV interview in Istanbul. Oil is on track for its third monthly gain as OPEC-led production limits, MIddle East conflicts and Venezuela's downward spiral imperiled global supplies. Prices have also been buoyed by President Donalt Trump's withdrawal from a 2015 Iranian nuclear accord and the re-imposition of sanctions against the No. 3 producer in the Organization of Petroleum Exporting Countries.
Brent future for July settlement rose 71% to $79.22 on the London - based ICE Futures Europe exchange, and traded at a $6.87 premium to WTI for the same month. The arbitrage closed below $7 for the first time in more than a week.
Corrections are of course possible for reversals towards $72 and even $71.86 if any longs are covered for fresh movements up. As the Oil market since OPEC started manipulating the market starting the war against U.S. shale industry, the price is making moves which are almost unpredictable thus keep your eyes open as the price is very sensitive. Small changes in the environment may lead to volatility.