Crude oil was unable to hold onto its gains on Monday after appearing for a while to have ended its bearish run. Oil prices have fallen for three consecutive weeks after the OPEC and Russia failed to surprise the markets with their decision to extend the oil production deal.
Commodities price are firmer today with base and especially precious metals ending a bad run off losses, while crude oil has extended its gains from the day before when it rallied sharply on the back of the weekly US oil inventories report.
Market participants in crude oil are continuing to shrug off persistent jawboning from oil ministers of some OPEC countries, most notably Saudi Arabia, about extending the production cuts into the second half of 2017, and possibly the first quarter of 2018.
The recent rally for crude oil, came to a shuddering halt this week with Wednesday’s wide spread down candle driving oil prices firmly back towards the $50 per barrel region, and wiping out much of the gains of the last few weeks.
Both oil contracts have bounced back a little after Thursday’s sharp plunge. The all-time high crude stockpile levels in the US is the number one reason behind oil’s inability to move further higher in recent weeks.
For oil traders, speculators and indeed corporate buyers, the price action on the daily oil chart reflects a confused picture for crude oil, and to mix metaphors for a moment, the waters have been muddied and remain confused and uncertain.
For obvious reasons, all the focus is on the OPEC meeting. As we pointed out the possibility yesterday, oil prices have bounced back very strongly today on renewed hopes that oil ministers will, after all, be able to hammer out a deal later on to limit crude production.
After months of uncertainty and speculation you would think there will be some clarity about the crude oil situation just days ahead of Wednesday’s OPEC meeting. Well, you would be wrong. In fact, very wrong.
Crude oil, like many other commodities and markets are present, continues to remain rangebound with the bullish momentum of earlier in the month now waning.
Crude prices jumped in reaction to the latest weekly US crude stockpiles data but then quickly went into reverse gear, before bounce back once again.
