Divine Intervention For Oil?
Today’s Spotlight Market
Crude Oil futures have been bolstered by a weakening US Dollar and have flirted with the $60 area over the past several sessions.? Last week?s GDP figure showed anemic economic growth in the US, while the Chain Deflator showed slight pressure, both of which can be viewed as negative for the greenback.? The Federal Reserve eliminated its mention of timeframe for raising interest rates and attempted to downplay the weakness in economic figures as a temporary phenomenon.? The Dollar Index also broke a near-term technical support level, which could lead to further weakness in the currency. ?
?Fundamentals
Saudi Oil Minister, Ali Al-Naimi, told a reporter that ?no one can set the price of oil ? it?s up to Allah? when asked indirectly how long his country would let Oil prices sit at their current levels.? The bull camp looked favorably on his non-answer.? There has been much speculation that Saudi Arabia may trim its production due to prices slumping for much longer than many OPEC nations would have liked.? Saudi Arabia is considering a halt to its recent air strikes on Yemen, which could suck some of the risk premium from the market.? There are reports of another port closure in Libya, which could cut some supplies to Europe.? Traders are looking forward to this week?s API number, and more importantly, tomorrow?s EIA inventory numbers.? The consensus opinion is leaning toward a build of around 1.5 million barrels for the week.? However, some market watchers are expecting Cushing, OK inventories to shrink, which can be seen as bullish for Oil prices.
Technical Notes? -? View Today’s Chart
Turning to the continuation chart, we see the June Crude Oil futures contract breaking through previous resistance around the 54.00 level.? Prices may not meet any meaningful resistance until the 70?s.? The RSI indicator is showing overbought technical levels, which could lead to some sluggishness in the near term.? Momentum has flattened, even as prices have risen, hinting at possible retracement or consolidation in the near-term.
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