Finally some good news for oil markets overnight, as a somewhat magically confluence of different factors came together to push both WTI and Brent higher by over 3 percent in New York trading. Comments by Halliburton suggesting shale oil drilling is plateauing, Nigeria agreeing to join the OPEC led production cap one production stabilises at around present levels (1.8m bid) had already stopped the rot from the previous day.
Saudi Arabia weighed in by signalling that it will continue to cut exports, most particularly to the United States in excess of its OPEC/Non-OPEC requirements. Finally the king hit to oil bears came from the American Petroleum Institute (API) Crude Inventory release showing a mammoth drawdown of 10.23 million barrels against an expected of 2..25 million barrels.
Having been led to water before and then disappointed, oil Traders will most likely wait for confirmation from the official U.S. DOE crude inventory numbers this evening before saying price nirvana is being achieved.
Brent spot has leapt from the Low 48 dollar mark overnight to trade around 50.40 in early Asian trading, also coincidentally its 100-day moving average. The double top at 50.00 now becomes support and from a technical perspective it has held Long term support at 47.70 very well indeed. Initial resistance lies at 50.75 before it's next major level, the 200-day moving average at 51.40.
WTI spot trades at 48.25 this morning having closed well above its 100-day moving average and intra-day support at 47.70. WTI's next target will be the 200-day moving average at 49.15 with a daily close implying a test of the magical 50.00 a barrel level could be on the cards.