The price of oil has been in a consolidation around the 60 handle for the best part of this week as traders look to OPEC and signs of a trade despite breakthrough between China and the US.
“The DOE reported a massive inventory draw in crude oil, gasoline and distillates, in yet another signal that prices should remain supported by a constructive supply-side narrative,” analysts at TD Securities explained.
Meanwhile, “Chair Powell emphasized that the Fed’s “watchful waiting” justified no bias for the next policy move. We were expecting his risk management message but we were not expecting as many Fed officials would associate that with no hikes this year. We revise our Fed forecast for no more rate hikes this year,” analysts at TD Securities wrote.
The technical outlook remains the same; While the price holds above the double-top highs and above the 57.93 horizontal prior resistance line going back to mid-Nov 2018, the market remains bullish. At this juncture, the price is supported at trendline support prior resistance of 59. Bulls look to the 61.8% Fibo of the Oct 2018 sell-off to late Dec lows at 63.74, reviving prospects for the 70 handle. On the flipside, on the wide, a fall to 54.50 will open a case for 50.50 as the 23.6% Fibo support structure.