WTI oil testing $50 per barrel once again

Oil_chart_daily_ACWhilst many commodities reacted strongly to the US employment data on Friday, with a consequent surge higher on US dollar weakness, oil prices failed to follow suit, and indeed for the WTI contract, closed the session marginally lower at $48.33 per barrel and off the high of $49.41 per barrel, thus continuing to trade in an extended consolidation phase.

In early trading today however, oil has picked up the bullish tone once again as it prepares to take yet another run to the $50 per barrel region with the contract at time of writing trading at $49.65 per barrel. Rig count was once again up last week rising by 9 to 325 thereby helping to provide additional support to the recovery for oil, and with the US dollar now coming under increasing pressure as the prospects for a rate increase appear to diminish, this may be the catalyst that is required to drive oil through this psychological level, and on towards the next region of resistance which awaits in the $53.02 per barrel area.

Last week’s oil inventories also helped to confirm demand, and whilst the draw of -1.4m bbls fell short of expectation at -2.7m bbls, nevertheless provided further evidence of an improving supply/demand relationship.

By Anna Coulling

Charts from NinjaTrader and indicators from Quantum Trading

About Anna 1054 Articles
Hi – my name is Anna Coulling and I am a full time currency, commodities and equities trader. I have been involved in both trading and investing for over fifteen years and have traded many different financial instruments, from options and futures to stocks and commodities. I write and publish articles ( mostly for free ) for UK and international publications on a wide variety of financial issues, and in particular I enjoy helping others learn how to invest and trade.

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