Crude Oil recap for 25.05.2018
And so another week has passed for market. Friday didn't lack action or drama, especially in the commodities, and in this case - Crude.
The enthusiasm with which the price started running up was quickly evaporated as statements for increased production outputs from major players as Russia and Venezuela, including OPEC statement as well subdued the minds of the investors. The dreams for Oil at $80 were quickly destroyed, for now. So what happened?
Price opened normally at 70.55, made small gains towards 70.69, still away from 71 and after data for the Rig counts, the price dropped sharp towards a low of 67.30 and found a settlement at 67.38. Baker Hughes oil rigs went up 15 on the week to 859 from 844 last week. This was a large increase prior last week as this is the 7th gain in the last 8 weeks. The gas rigs dipped to 198 from 200 last week, as the expectation was for 198. Total rigs moved up at 1059 from 1046 lat week as the expectation was for a decline to 1045. This was the catalyst for killing the longs and moving bellow even 70.
In the meantime BNB Paribas is raising their forecast for average price in 2018 for $72 for Crude Oil and $78 for Brent. Societe Generale revised their oil forecast for Q4 2018 to $73 and $78 for Crude and Brent respectively.
As for the price of Crude we need to see if it will actually make an attack at the 61.8 Fibo retracement where the price tried many time to breach and after that it bounce sharply (marked by the blue figure). Moving and closing bellow will open room for an attempt at 50 Fibo. So before making any sells, watch out for the 61.8 Fibo and open your eyes for anything that can swiftly change the tide of the price.