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Oil receives a boost but remains weak

Market Analysis

USOIL, Daily

US crude oil  printed a nine-session high of $48.84 in London morning trade, with gains coming on the back of reports that up to 500k bpd of Libyan exports have been shut in due to the closure of a pipeline there. After the close on Tuesday, the API reported a 1.9 mln bbl increase in weekly U.S. stocks, slightly higher than expected, though the market will look to 14:30 GMT data from the EIA for corroboration. Profit taking has been noted into the EIA, with prices settling back into $48.50 in early N.Y. trades.

Some relieve for the beleaguered oil price as a recent floor appears to have formed at $47.60. However, the commodity remains fragile and still trades south of the key 200 day moving average.  A break over the $48.60-70 resistance zone is required before attracting more buyers, and move back to the $50.00 area. The RSI and MACD both remain negative.

 

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Stuart Cowell

Senior Market Analyst

HotForex

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