WTI en-route for the 23.6% Fibo retracement of Sep decline

• Oil prices are rising in a continuation of the correction of the 40% drop since October's business that started to take place in December. 
• West Texas Intermediate crude is en route to the 23.6% Fibo retracement of the October decline located at around $50.50bbls. 
• Oil has gotten a boost on the talk of a Saudi cut in exports by 800K.

Oil prices picked up into the final days of 2018 and have continued to move up. Profit taking kicked in in thin holiday markets where the price managed to regain the 47 handle. Since then, the price has moved higher on a number of factors. One factor that has buoyed the price of oil comes with OPEC and non-member producing nations cutting production in an accord agreed back in Dec 2018, due to start in January this year. OPEC and its production partners outside the cartel, led by Russia, agreed in early December to collectively hold back output by 1.2 million barrels a day for the first half of 2019. Today, WTI has gotten a boost on the talk of a Saudi cut in exports by 800K from Nov levels. The Saudis are therefore now planning to reduce exports to 7.1 million barrels per day.

Such upbeat sentiment on supply restraint coupled with less concern over an economic slowdown in the US following an outstanding nonfarm payroll report on Friday is adding to the upside. At the same time, futures scored their first weekly gain in a month on the back of Beijing and Washington announcing that there will be trade talks taking place this week, helping to lift prices to their highest finish since mid-December. Chinese Vice Premier Liu He, a top economic adviser to Chinese President Xi Jinping, was among attendees, and some optimism has been drawn from a top-level official attended rather than lower-ranking officials, according to Bloomberg's reports. 

Surveys show that December crude output see their biggest monthly declines since January 2017

At the same time, recent surveys have shown that December crude output from major producers saw their biggest monthly declines since January 2017. On Friday, the Energy Information Administration, (EIA), revealed little change to U.S. stockpiles of crude for a second week in a row. The EIA said domestic crude supplies inched up by just 7,000 barrels to stand at 441.4 million barrels for the week ended Dec' 28th. For the week ended Dec. 21, the EIA saw crude stocks down 46,000 barrels as well. Separately, the American Petroleum Institute on Thursday reported a drop of 4.5 million barrels.

WTI levels

Spot prices rallied to a high of $50.03 bbls from a low of $48.30bbls. Technically, the price continues to correct higher through the recent trend line resistance and the 21-D SMA. Bulls are looking towards the 23.6% Fibo retracement through 50.50 which guards the 38.2% fibo retracement located at 55.50. Both RSI and MACD lean with a bullish bias.