Crude Oil Price Outlook: Fresh 5-Month High as Libyan Clashes Escalate
Crude Oil Price Analysis, News and Chart.
- Fears that global economic growth has peaked may weigh on oil.
- Violent clashes in Libya likely to hit supply - will OEPC respond?
Crude oil touched a new 5-month high Monday as the violent clashes in Libya continue, adding to supply fears from a region that pump over 1 million barrels a day. OPEC has not yet said if it will increase output if Libyan oil goes offline. OPEC is still expected to extend the current supply cuts beyond the current June deadline, keeping any downside in the price of oil in check. Last Friday’s US NFPs showed the American economy still growing at a decent clip, despite many analysts predicting a recession in 2020, and this week’s economic data will need to be closely monitored. While the US economy may still be expanding, a recent report from the IMF cut global growth forecasts saying the outlook is ‘increasingly unsettled’, while the WTO cut world growth to 2.6% for this year - compared to 3.0% in 2018 - sharply lower than previous expectations of 3.7% expansion in 2019.
Crude oil currently trades just over $70.00/bbl. and is touching strong resistance at $70.57/bbl. the 38.2% Fibonacci retracement level of the June 2017 – October 2018 rally. Oil remains above all three moving averages and recent moves point to the shorter-term moving averages breaking above the longer-dated moving averages, a bullish ‘golden cross’ formation. Oil remains in overbought territory according to the CCI indicator and may need a period of consolidation if it is to push higher again.
Crude Oil Price Chart Daily Time Frame (July 2018 – April 8, 2019)
IG Client Sentiment shows that retail traders are heavily net-short of Oil, a bullish contrarian indicator.
--- Written by Nick Cawley, Market Analyst
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