TechnoMeter

On Wednesday, after the EIA released the data that Crude Inventories declined by 4.73m barrels and that Saudi was delivering less crude, holding true to their comittment may act as a force for higher prices. Of course, as we continue to see in Friday’s Baker Hughes data, UUS production continues to push higher and acts as a road block for a significant price recovery. However, as we see increased gasoline demand (+2.1% YoY), a weaker USD and an overall supportive report from the EIA, it’s worth it to keep an eye on the charts to see if a breakout could be in the works.

There are a handful of technical highlights to watch for that would act as catalysts for a Bullish recovery if the price exceeds. First, the opening range high for the 2nd half of 2017 (first two weeks of July) sits $47.29, Second, the combination of the daily Ichimoku Cloud and Bearish price channel (downward sloping – red) align near $48.20-$47.50. Lastly, the 61.8% Fibonacci Retracement of the May to June range rests at $48.20. A break above the zone $47.29-$48.20 on a daily closing basis should be watched to combine with a desperately awaited Oil recovery.
While the dots may be in place to be connected, it’s worth noting that without a price recovery, these points mentioned above (Saudi cutting back on US exports, increased Gasoline demand, 4.7m barrel inventory draw), remain unfulfilled anecdotes to a Bullish thesis. Lastly, we have seen a strong move off long-term support, which could also show that should a break above $48.20 develop, a base may be set. Maybe. A reversal lower from resistance would turn attention back to long-term support at $43.50/42 per barrel.

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