US Crude Oil Price: Uptrend Could Extend Further
US crude oil price, news and analysis:
- The price of US crude oil has hit its highest level for three months and the uptrend that began late in December shows no sign yet of ending.
- OPEC supply cuts and US sanctions on Iran and Venezuela are outweighing high US output and the global economic slowdown.
Oil price still trending higher
The price of US crude oil is extending the advance that began in late December last year and its rally so far shows few signs of exhaustion despite having hit its highest level since late November.
As the chart below shows, it remains within a rising channel, suggesting that from a technical perspective the outlook is for further gains, with channel resistance at $57.71 a possible near-term target.
US Crude Oil Price Chart, Daily Timeframe (November 14, 2018 – February 20, 2019)
Chart by IG (You can click on it for a larger image)
From a fundamental perspective, the oil price continues to benefit from supply cuts led by the Organization of the Petroleum Exporting Countries. Late last year, OPEC and its allies agreed to reduce output and since then exports have declined sharply, due largely to supply cuts by Saudi Arabia.
Additionally, US sanctions on Iran and Venezuela are reducing the amount of oil being produced and exported.
However, US shale-oil output is expected to hit a record high in March, according to the US Energy Information Administration (EIA), while signs of a global economic slowdown suggest that demand will likely weaken in the weeks ahead.
As for the near-term outlook, traders will be watching out for the American Petroleum Institute’s weekly US inventories data, due Wednesday. In its previous weekly report it calculated that stockpiles fell by 998,000 barrels compared with the week before’s 2.5 million increase and any further decline will likely boost the price further.
Then, Thursday brings the official numbers from the EIA, with analysts expecting an increase of 3.1 million barrels in weekly crude stocks, down from the previous rise of 3.6 million.
More to read:
Resources to help you trade the markets:
Whether you are a new or an experienced trader, at DailyFX we have many resources to help you:
- Analytical and educational webinars hosted several times per day,
- Trading guides to help you improve your trading performance,
- A guide specifically for those who are new to forex,
- And you can learn how to trade like an expert by reading our guide to the Traits of Successful Traders.
--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.