Yahoo Finance Oil Price Fundamental Weekly Forecast – Setting Up for Rangebound Trade
U.S. West Texas Intermediate and international-benchmark Brent crude oil futures close higher last week after the U.S. Dollar fell to a three-month low and global equity markets posted their biggest weekly gain in six years. A weaker dollar often boosts oil and other dollar-denominated commodities.
April WTI crude oil settled at $61.55, up $2.56 or +4.34% and April Brent cruel oil finished the week at $64.84, Up $2.05 or +3.26%.
The upside was limited, however, due to a projection for rising U.S. production.
Also supporting oil prices was a statement from the United Arab Emirates energy minister saying oil producers led by Saudi Arabia and Russia to draft an agreement on a long-term alliance by the year end.
Earlier in the week, Saudi Energy Minister Khalid al-Falih said OPEC hopes to keep limiting crude output to leave the market tight.
In other news, U.S. drillers added 7 oil rigs in the latest national count kept by oilfield services firm Baker Hughes. The count has risen by 51 oil rigs in the last four weeks, putting the total at a nearly three-year high of 798.
Forecast
This week, investors are likely to continue to monitor global stock markets, the U.S. Dollar and U.S. production figures. These three factors were largely responsible for last week’s price action. Activity is likely to be below average due to the Lunar New Year holiday.
Traders will also be watching for further developments regarding the proposed agreement between Saudi Arabia and Russia.
With drilling activity in the U.S. continuing to pick up, producers are looking more efficient than they were a year ago. Essentially, rising U.S. supplies and the liquidation of speculative longs are likely to keep oil prices under pressure.
The daily chart patterns suggest WTI and Brent crude oil are likely to remain in a range over the near-term. The direction of WTI crude is likely to be determined by trader reaction to the 50% level at $61.20. The pivot for Brent crude is $64.91.
This article was originally posted on FX Empire
