APAC: Oil, Initial Thoughts

Oil recovery continued on Friday, ignoring yet another increase in the Baker Hughes’ rig count and concentrating on the further reduction in the global oil supply glut. Over the weekend, Iraq pledged to fully comply with its production cut targets, but the effect has been muted with WTI opening unchanged from its Friday close.

 

Both Brent and WTI’s price action continue to be constructive in the short term, with both closing at their highs on Friday. However, the going may get tougher to the upside from here in the face of heavy shale producers hedging via the futures market.

 

WTI spot has resistance just above present levels at 50.60, the early March high and the 100-day moving average. A daily close above opening up a possible move to the 52.00 region. Brent spot has resistance at 54.00 a barrel, the 55-day moving average with further resistance at 54.50.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst - Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia and the New York Times. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley