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Crude Oil Prices Surge on Hopes for Output Cut Extension

Crude Oil Prices Surge on Hopes for Output Cut Extension

Ilya Spivak,

Talking Points:

  • Crude oil prices surge on hopes for OPEC output cut extension
  • EIA drilling productivity data may limit upside follow-through
  • Gold prices on the upswing after soft US CPI, retail sales stats

Crude oil prices surged amid reports that Saudi Arabia and Russia along with several other major producers agree to extend the OPEC-led production cut scheme expiring mid-year through the first quarter of 2018. It remains to be seen if the move maintains momentum as the EIA drilling productivity report crosses the wires, reminding markets that swelling swing supply has bedeviled the cartel’s efforts thus far.

Gold prices continued to gain having rallied Friday after soft US economic data cooled Fed rate hike bets. Treasury bond yields and the US Dollar fell in tandem, boosting the relative appeal of non-interest-bearing and anti-fiat assets including the yellow metal. From here, a lull in top-tier scheduled event risk may leave established trends undisturbed but lacking fuel for significant progress.

Retail traders are betting on gold price gains. Find out here what this hints about on-coming trends!

GOLD TECHNICAL ANALYSISGold prices are edging higher as expected after producing a bullish Morning Star candlestick pattern. From here, a break abovesupport-turned-resistance at 1241.50 confirmed on a daily closing basis exposes the 14.6% Fibonacci expansion at 1258.62. Alternatively, a turn below inflection point support at 1217.70 targets the 38.2% level at 1199.07.

Chart created using TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices continue to push higher after breaking resistance at 47.59, the 38.2% Fibonacci retracement. A daily close above the 50% level at 48.77 exposes trend line support-turned-resistance at 49.37, followed by the 61.8% Fib at 49.94. Alternatively, a turn back below 47.59 targets the 23.6% expansion at 46.14.

Chart created using TradingView

--- Written by Ilya Spivak, Currency Strategist for

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.