Karachi, January 08, 2018 (PPI-OT): Crude Oil
The WTI Crude Oil markets rallied initially during the day but then rolled over rather significantly. By doing so, we felt to the $61.25 level. That’s an area that has offered a little bit of support, but I think given enough time it will be yet another blip on the radar. The fact that we have rallied from here is special, other than it lines up nicely with the uptrend. The $62 level will more than likely be targeted from here, in a breakout above that level should send this market to the $62.50 level. If we were to break above there, the market could go looking towards the $65 handle next. Brent markets fell significantly during the course of the session on Friday, but bounced significantly from the $67.30 level. The fact that we bounced as hard as we did suggests that we are going to continue to see a lot of buying pressure in this market, and that we are probably going to go looking towards the $70 level.
Oil rose after drilling activity in the U.S eased, adding to signs the global crude surplus is abating
Crude futures rose 0.5 percent, following a 1.7 percent increase last week
Rigs drilling for crude fell by five to 742 in the seven days ended Jan. 5, according to Baker Hughes data Friday
Hedge funds retreated from the most bullish stance on WTI in 10 months during the week ended Jan. 2
Oil had its strongest opening week for any year since 2013
Oil prices were stable today, supported by a slight decline in the number of U.S. rigs drilling for new production, with crude holding just below near three- year highs reached last week.
U.S. West Texas Intermediate (WTI) crude futures were at $61.50 a barrel, 6 cents above their last settlement. Futures reached $62.21 last week, the most since May 2015. Brent crude futures were at $67.66 a barrel, 4 cents above their last close. Brent hit $68.27 high last week, the highest since May 2015.
Traders said the gains were due to a slight decline in the number of U.S. rigs drilling for new production, which eased by five in the week to Jan. 5 to 742, according to data from oil services firm Baker Hughes.
Despite this, U.S production is expected to break through 10 million barrels per day very soon, largely thanks to soaring output from shale drillers. Only top producers Russia and Saudi Arabia produce more.
The U.S. oil price is now into a range that is anticipated to attract increased shale oil production. Traders may decide that discretion is the better part of valour while markets wait on evidence of what happens to the rig count and production levels over the next couple of months.
Rising U.S. production is the main factor countering production cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) and by Russia, which began in January last year and are set to last through 2018.
Money managers cut their WTI net-long position — the difference between bets on a price increase and wagers on a drop — by 3.8 percent to 396,381 futures and options in the week ended Jan. 2, according to data from the U.S. Commodity Futures Trading Commission on Friday.