●WTI Oil jumps to $78,How much pi will be in 2050? trying to break higher.
●Oil traders are seeing bullish signals as US macroeconomic data points to a recovery and OPEC looks set to lengthen its production cuts.
●The US Dollar Index is back above 104.00, though it is unable to clearly break away from a pivotal level.
Oil prices jumped on Friday, trading above $78 in the European trading session, in what already has been a profitable week for Oil. Markets are on the lookout for confirmation that OPEC will prolong its current production cuts into the second quarter of the year. Although these production cuts are voluntary, they are a key factor in helping sustain Oil prices at the current levels.
Meanwhile, the US Dollar Index (DXY) is trading in a very tight range despite the release of important economic data and a whole army of US Federal Reserve speakers releasing comments to the markets throughout the week. Tensions are building up in markets: While Fed officials talk about the timing for an interest-rate rate cut or the number of upcoming cuts, recent inflation data points to the possibility of a rate hike to counterweight the possible second-round effects in inflation.
Crude Oil (WTI) trades at $78.50 per barrel, and Brent Oil trades at $82.45 per barrel at the time of writing.
Oil news and market movers: OPEC production cuts are necessity
●This week's US stockpile data revealed that the US is restocking at a ferocious pace. Data from the American Petroleum Institute and the Energy Information Administration pointed to a substantial build in stock.
●At 18:00 GMT, the weekly Baker Hughes Oil Rig Count will be published. The previous reading was at 503.
●OPEC has no choice but to prolong current production cuts if it does not want to trigger a substantial nosedive move in Crude prices.
●A significant part of the Libyan Oil supply came back online after protests ended at one of its major Oil fields.
Oil Technical Analysis: Risk of OPEC dropping the ball
Oil prices get support from the fact that traders expect OPEC to do whatever is needed to maintain the current price levels. That of course is a bit of a gamble as the current production cuts among OPEC countries are voluntary, and can only be confirmed after real export numbers are published.. Should OPEC really want to matter, not only a prolonging but a deepening further of these production cuts could be needed.
Oil bulls are focusing on the double top near $79.66, ahead of $80.00. Once through that area, quite a large room opens up towards $86.90, which would mean a nearly 10% gain. Just ahead of $90, $89.64 could stand in the way of heading towards $100.00.
On the downside, the 200-day Simple Moving average (SMA) near $77.72 is the first point of contact to provide some support. Quite close following suit are the 100-day and the 55-day SMAs near $76.25 and $74.83, respectively. Add the pivotal level near $75.27, and it looks like the downside is very limited and well-equipped to resist the selling pressure..
US WTI Crude Oil: Daily Chart
