Global macro overview for 14/07/2016:
The Crude Oil Inventories data published yesterday revealed lower than expected drawdown in stockpiles. Market participants had expected the inventories drain of -3,250K barrels that is more than -2,223K barrels a month ago, but the number of the stockpiles turned out to be at the level of -2,546K barrels. Moreover, in the interview in German newspaper Handelsblatt, the newly appointed Saudi energy minister Khalid al-Falih, said that the oil industry needs a price of more than $50 per barrel to sustain investments. Moreover, he added that the price above the $100 is too high and below $50 is too low to sustain investment, so the market should find the balance point somewhere in between. He also noticed a decrease in supply by roughly 1million barrels per day mainly due to the output drops in the United States and Canada.
Let’s now take a look at the crude oil technical picture in the 4H time frame. Since the top at the level of 51.66, the market is posting a consecutive series of lower highs and lower lows, indicating that a corrective downtrend is still in progress. Currently, the price reversed down again after hitting the 100-period moving average at the level of 46.95 and it is heading to test the technical support at the level of 44.42 again. The double bottom formation is possible here.
The material has been provided by InstaForex Company – www.instaforex.com