The trading instrument has been growing for the second week in a row in view of reduced oil production in the USA. According to the US Department of Energy, the volume of production in the country dropped by 100K barrels a day to 9.25 mln barrels a week which is the biggest weekly fall since July 2016. Moreover, the number of active drilling rigs in the USA reduced for the first time in 23 weeks.
Currently, OPEC agreement on the reduction of production volumes does not play a decisive role in the formation of oil prices, because the countries that are not parties to the agreement (e.g. Libya and Nigeria) continue to expand production, and the USA produces more and more LTO.
This week market participants should pay attention to the data on oil and petrochemicals reserves from the USA that will be published on Wednesday and Thursday. Moreover, comments from major manufacturers on the fulfillment of OPEC agreement should be monitored.
On D1 chart the instrument is trying to consolidate above the resistance level of 48.75. Bollinger Bands® are reversing upwards, while the price range remains unchanged which is a sign of upward trend continuation. MACD histogram is in the negative zone keeping a weak sale signal. Stochastic has entered the overbought zone.
Indicators don't give a clear signal for entering the market; therefore pending sell and buy orders may be placed.
Support levels: 48.40, 47.35, 45.95, 44.85.
Resistance levels: 48.85, 49.90, 50.80, 51.85.