For Brent crude oil the sell-off from a high of $58.37/b at the very start of the year and down to a low of $53.58/b yesterday was purely a technical sell-off. There were no obvious news items driving it to yesterday’ low. Bearish statistics on Tuesday and Wednesday came too late to the party to be a good explanation for the sell-off. Since the sell-off was technical we don’t need any specific bullish news items to drive it higher again either even if it would help. Thus up again is the dynamics. Technical targets now points towards $59-60/b. This should be a great opportunity for oil producers to sell and hedge at. It is likely going to be high rig counts the coming weeks (19:00 CET on Fridays). This could moderate the uptick in prices. However, the market doesn’t seem to care about neither US rig count nor US crude oil production at the moment. All focus is now on OPEC compliance which seems to move ahead as planned. If we add some spices of possible set-backs in production in Nigeria and Libya this would also help the price higher. However, bulls are probably going to be too brave yet again and we expect the oil price to fall back again towards $55/b after the forthcoming test up towards $60/b.
US crude production heading higher -…”We don’t care because now all eyes are on OPEC!!”
