OIL: Back Above $60 - For How Long?
From my recent articles, you would have known I was short from the $60 region down to $57.50/$57.00 capturing a nice move down. Since then, price has rebounded defiantly to a high of $60.36 at the time of writing. So, the all-important question, where to next?
Production cuts have given the commodity a slight lift, however, global demand has softened dramatically and inventories have had a sharp increase in Q2 this year. Going forward I personally feel oil could be in for a big drop going into Q3/Q4 this year for those 2 reasons. An oversupply to the Oil market as well as a big drop in demand is a perfect storm, especially in such a volatile market like Oil. Production cuts agreed in the latest G20 summit are not enough for the market to sustain a move higher going into the latter half of the year.
Technically the price is approaching a big FIB level, where we do have some good resistance and a downward sloping trend-line as well, 3 confluences before we drop down a time frame. Defiantly keep your eyes out and see how this develops.