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Published on 6/03/2018 10:58:26 AM | Source: Enrich Commodities India Pvt Ltd

Crude oil prices edged higher sustained by an account of further declines in crude stockpiles - Enrich Commodities

CRUDEOIL

Crude oil prices edged higher sustained by an account of further declines in crude stockpiles at the cushing storage hub in Oklahoma signifying that solid domestic economic growth persistent to support crude demand.

Inventories at the key U.S. hub – already at the lowest since 2014 – are expected to continue to drop as producers opt to sell rather than store crude as current prices continue to trade at a premium to forward prices – a market structure known as backwardation.

That helped balance, comments from the International Energy Agency (IEA) suggesting that US shale output is set to gush over the next five years.

Technical outlook

Crude oil daily chart has formed "Megaphone chart” pattern. The last session ended up bullish in trend after retesting a key support holding at $60(3896) inside the channel. The market is expected to continue in bearish momentum once the retests a key resistance level holding at $64(4156). The downside rally could test all the way through $62-60(4026-3896) levels in the upcoming sessions. Alternatively, if the market breaks above the resistance level then it might continue in bullish momentum. The upside rally could test $65-66(4220-4285) levels.

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