Brent Crude Oil Calm Ahead of US Oil Rig Count Data
Crude oil price on the WTI benchmark edged up slightly in the last hour as the US Treasury Secretary Steve Mnuchin hinted that the Trump administration is considering acquiring stakes in energy companies as a way of guiding them through the energy market turmoil.
According to Mnuchin, “the idea of the US government buying fuel for the US in advance” could be one of “several options” to assist the oil and gas industry. As at the last check, crude oil price on the West Texas Intermediate (WTI) benchmark was $17.01, representing an increase of 0.6% on the day.
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The crude oil price for WTI is just about lifting off from the support formed by the November 2002 lows at 16.75, after yesterday’s price candle was able to close above that level. Continuation of price advance could lift the WTI to the April 2003 lows at 25.98, but this move would have to contend with last week’s support at 19.78 that now acts as a resistance.
On the flip side, if the core market fundamentals kick in (low demand and exhaustion of storage facilities which could suppress production), we would expect the crude oil price to decline further. A decline below the 2002 lows opens the pathway for the 1998 lows, with the 1994 lows at 13.33 intervening.
The market continues to remain dynamic with considerable volatility. Let’s see what next week will bring.