On Tuesday, the Saudi oil minister reiterated his country’s commitment to meeting rising Chinese demand for crude. The statement sent oil prices down slightly as it was widely interpreted to imply that the Saudis are prepared to continue battling on market share with little concern for the price.
The US Energy Information Administration (EIA) yesterday, released its latest survey. The report was expected to show a decrease in crude oil stocks with estimates at 1.333 million barrels but the actual was worse than expected rising to 1.910 million barrels.
Yesterday crude oil rose breaking above the bullish flag pattern and close in the green near the high of the day, but on below average volume. The commodity is still in a recovery phase and the stochastic is showing an overbought market but even with the commodity well into overbought territory, we should not fight the strong upward correction just yet.
Expecting upward move to a bullish flag target at 62.95 on a break above previous day high at 59.30 (scenario 1) or a bounce at 57.90 could push the commodity up to at 62.95 (scenario 2).
LCrude is a CFD written over Light Crude futures.