Oil bulls capped again, correction headed for break of 4hr sma?
WTI has been making tracks after posting a lower major low on 7th Feb for the year. The commodity has bene better bid in the sideways choppiness and 2017 range between $50.35 and $54.58. However, last week's strong close and the four-session gain were shortlived. We are back in a correction again with the greenback that took flight to the 101 handle in earlier trade.
At the same time, there are continued concerns over growing U.S. crude production. This comes after last week's data Baker Hughes data that showed that there is more oil production in the U.S., which isn't part of the OPEC agreement and this continues to pressure prices. The data showed that active U.S. rigs drilling for oil, which serves as a proxy for oil activity, rose for a fourth consecutive week. U.S. shale is one to watch and where some analysts are expecting it to be weighing increasingly heavily on the market. Earlier, we had OPEC's Barkindo saying that It's premature to say whether we need to extend oil deal past June.
Oil levels
WTI is caught between a wide sideways range with breakout points at round numbers on the downside such as $52 (4hr sma) and $51, ($51.20 is where the 4hr 200 smoothed ma is located, holding up bears on the 7th Feb). To the upside, $53.80 with YTD target at $54.58.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
