Karachi, February 02, 2018 (PPI-OT): Crude Oil
Oil market rallied yesterday, breaking above the $65 level. It looks as if the buyers are trying to make a stand here, and that we are trying to go towards the highs yet again. Longer-term, I believe that the $66.50 level should be a target. I think that the market will try to break above there, and when it does it’s likely that we will go to the $67.50 level next. I also recognize that there is a massive amount of support below near the $64 level, but again with the jobs number coming out of America, the volatility in the US dollar could make it difficult to trade today. Brent markets also rallied, reaching towards the $69.50 level. The $70 level above is a target, and I think breaking to the upside certainly puts a lot of bearish pressure to bed. The $70 level is a large, round, psychologically significant number so it would not surprise me at all if it took a couple of attempts to break above it.
Oil was little changed at $65.83 a barrel on the New York Mercantile Exchange
The contract rose 1.7 percent to $65.80 a barrel yesterday
The specter of expanding U.S supply was weighed against Wall Street banks growing faith in a price rally
U.S. output surged above 10 million barrels a day for the first time in more than four decades in November
Goldman Sachs sees Brent crude reaching $75 a barrel over the next three months
Oil rose for a third day today after a survey showed strong compliance with output cuts by OPEC and others including Russia, offsetting concerns about surging U.S. production.
Brent futures, the global benchmark, were up 24 cents, or 0.3 percent, at $69.89 a barrel. U.S West Texas Intermediate (WTI) crude was up 33 cents, or 0.5 percent, at $66.13 a barrel.
Production by the Organization of the Petroleum Exporting Countries (OPEC) rose in January from an eight-month low as higher output from Nigeria and Saudi Arabia offset a further decline in Venezuela and strong compliance with a supply reduction pact, a Reuters survey showed.
OPEC pumped 32.4 million barrels per day (bpd) in January, the survey found, up 100,000 bpd from December. Last month’s total was revised down by 110,000 bpd to the lowest since April 2017.
Even so, adherence by producers included in the deal to curb supply rose to 138 percent from 137 percent in the month of December, the survey found, suggesting commitment is not wavering even as oil prices hit their highest level since 2014.
“It underscores the commitment of the cartel, and their Russian partners, to keep a floor under the oil price,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader. That is drawing investors’ focus away from the rise in U.S. production.
U.S. crude output surpassed 10 million bpd in the month of November for the first time since 1970, the Energy Information Administration said earlier this week. The next glimpse into U.S. supply growth will come from the weekly Baker Hughes rig count later today. Drillers added 12 rigs in the week to January 26, the most since March.