Oil prices are continuing their uptrend as traders believe that supply concerns are likely to be addressed by rising demand. There is optimism about the global economy and how we are experiencing a recovery in economic growth. It is essential that traders do not lose sight of a large number of US rigs coming online and how they could disturb the entire supply equation.
We have seen this time and time again when the OPEC cartel tries to increase the supply production systematically, but the US producers take advantage of higher oil prices and start bringing more oil rings on the market. In terms of the price action, we still have crude and Brent prices trading below the 50-day SMA on the daily time fame. We need to see the price breaking above the 50-day moving average before we can be 100% confident that the retracement is over for crude. The Brent oil chart is very similar as well as the price is struggling to break above the same 50-day SMA on the daily time frame.
