Crude Makes a Two-Week High: Fundamentals vs Technicals
Rowan Crosby • 1 min read
Crude Oil maintained its most recent bull run on Monday, despite the holiday in the US. Although traders are getting nervous thanks to a changing fundamental picture.
Yesterday I wrote about the fact that we might see a top in Crude around the $70 mark. My thinking was that the US continues to ramp up production. The latest Baker Hughes rig count increased by 7 to 798. That’s the highest its been since April 2015.
Money managers are also trimming their bullish bets. The number of long positions by hedge funds once again declined according to the Commitment of Traders report on Friday.
63.00 appears likely to provide a degree of resistance ahead. If we’re able to crack that level then there is little standing in the way as we run back up to the highs at 66.00.
I said yesterday that I suspect 70.00 will be the high for 2018. There are many calling for highs in oil at $100 plus. Despite the fact that OPEC and Russia continue to try and manipulate supply to drive prices higher, I think the game has changed.
The US has too much say in the way oil is produced and they can quickly and easily fill any shortfalls. Just look at the Baker Hughes data as an indicator of future supply.
WTI Crude Oil – 240 min Chart.