News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • China to promote US trade ties based on mutual respect, China to keep Yuan basically stable at reasonable level -BBG
  • China plans 3.65 trillion Yuan of special local government bond sales in 2021 -BBG
  • China sets 2021 GDP growth target at above 6%, aiming to add more than 11m urban jobs in 2021. Plans 2021 budget deficit at 3.2% of GDP vs 3.6% a year ago -BBG
  • 🇵🇭 Inflation Rate YoY (FEB) Actual: 4.7% Expected: 4.7% Previous: 4.2% https://www.dailyfx.com/economic-calendar#2021-03-05
  • BoJ's Kuroda: Not in state to say BoJ will widen yield target band, BoJ needs more discussions on the yield band -BBG
  • BoJ's Kuroda: Won't hesitate to add easing if needed, will mull further extension of virus program if needed. There is a need to keep yield curve low -BBG
  • RT @FxWestwater: Dow Jones Sinks Below 31,000, $AUDUSD Trendline Breaks as Yields Surge Link: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2021/03/05/Dow-Jones-Sinks-Below-31000-AUDUSD-Trendline-Breaks-as-Yields-Surge.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/UJSmMJx…
  • BOJ's Kuroda says stock market reflects economy and business outlooks - BBG
  • Heads Up:🇵🇭 Inflation Rate YoY (FEB) due at 01:00 GMT (15min) Expected: 4.7% Previous: 4.2% https://www.dailyfx.com/economic-calendar#2021-03-05
  • The British Pound’s recent slip lower against its major counterparts may prove short-lived. Key levels to watch for GBP/USD, GBP/JPY, GBP/CHF and EUR/GBP. Get your $GBP market update from @DanielGMoss here:https://t.co/Y48cF2qi9M https://t.co/4IINZf3zrn
Crude Oil Surges as Economic Recovery Aids Outlook, Copper Faces Technical Hurdle

Crude Oil Surges as Economic Recovery Aids Outlook, Copper Faces Technical Hurdle

Thomas Westwater, Analyst

Crude Oil, Economic Recovery, Copper, Technical Forecasts – Talking Points

  • Crude Oil pushes into fresh yearly highs after OPEC+ holds production cuts
  • EIA inventory figures point to bullish recovery as US economy recovers
  • Copper prices in danger as Descending Triangle pattern sends bearish signal
Oil Forecast
Oil Forecast
Recommended by Thomas Westwater
Get Your Free Oil Forecast
Get My Guide

Oil prices are surging this week on declining inventory levels, OPEC+ developments, and an improving global economic outlook. U.S. benchmark West Texas Intermediate (WTI) prices rose above the 56 handle for the first time since last January. Increased stimulus bets have also bolstered prices as Democrats on Capitol Hill continued progress towards passing a massive $1.9 trillion fiscal relief package. Along with oil prices, markets are reflecting optimism in fiscal stimulus bets through the 10-year Treasury yield as investors move away from the safety of US government bonds.

Crude oil vs 10-year Treasury yield

Crude oil prices climbed nearly 8% so far this month following an 8.28% gain in January. Tightening supply levels have helped lift the commodity as Covid-induced economic restrictions continued to ease across major economies. The US Energy Information Administration’s petroleum report for the week ending January 29 showed a 994k crude oil inventory draw. Analysts were forecasting a build of 446k, according to the DailyFX Economic Calendar.

OPEC+ kept its oil output policy unchanged on February 3 after its meeting of the Joint Ministerial Monitoring Committee (JMMC) concluded. A press release statement noted that compliance with production adjustments remain high among participating countries. Moreover, the statement also praised falling inventory levels in OECD countries but cautioned that the outlook remains uncertain.

Crude oil vs EIA inventory

While a question mark continues to hang over the global economic recovery, the distribution of vaccines have injected a broad sense of optimism through the global investing community. Still, a broad recovery remains far from certain, with vaccine distribution hurdles posing a potentially significant risk to an already fragile global economy.

Europe is one area already facing problems as governments struggle to coordinate and secure adequate vaccine supplies. Tomas Dvorak, an economist at Oxford Economics, told the New York Times that, “There is definitely a risk that vaccine distribution continues to be disappointing.” The Eurozone faces a double-dip recession after troubling economic data points to a second consecutive quarter of economic contraction.

Crude Oil Technical Forecast

Crude oil has extended above the psychologically important 56 handle as bulls drove prices higher. A trendline formed from the 2018 high may provide some resistance near the current level. The Relative Strength Index (RSI) is also flashing an overbought signal, but momentum may continue driving prices higher. Further upside is supported by the MACD crossing above its signal line. A drop down to the 20-day Simple Moving Average – which has supported price action since last November – may offer an area for prices to consolidate before the next push higher.

Crude Oil Daily Chart

Crude Oil Chart

Chart created with TradingView

Copper Technical Forecast

Copper prices have stalled since reaching new multi-year highs in early January. Since then a series of lower highs has developed the upper bound of a Descending Triangle. The 50-day SMA appears to be underpinning prices, but another test of the triangle’s horizontal support level could see prices breakdown if breached. To the upside, the descending trendline channel will need to be overtaken for a chance to make fresh highs.

Copper 4-Hour Chart

Copper chart

Chart created with TradingView

Oil, Copper TRADING RESOURCES

--- Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwateron Twitter

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

DISCLOSURES