We saw yet another high close on Crude last night with a boost coming from reports that Saudi Arabia has told OPEC officials it wants to continue output cuts for an additional six months.
A further boost came later when the API released its data showing U.S. crude inventories falling by nearly 1.3 mill barrels compared with expectations of an increase for the week.
Today’s EIA reports may well provide a similar boost if their release shows a similar change. But I am a bit concerned with the reliability of these releases after last week’s contradictions, and with the degree of variation from the industry’s own expectations. Is it that these reports are substantially different in what they actually report or is it that the data collection is either unreliable or erratic in its availability? But, I guess, the key issue from a trader’s perspective is not whether they are accurate or inaccurate, but whether, and by how much, the results differ from the expectations!
There are also a number of so-called geopolitical situations developing concerning Syria and North Korea and how the US, Russia and China are separately responding to them.
Seems to me that in a short week before the Easter break, markets may be thin, affected by profit-taking rather than new position-taking and therefore vulnerable to sharp, over-reactive spikes in response to any events or comments.
The hourly chart gave another signal later in the day which produced a modest profit overnight. The blue pipeline ribbon crossed with a close through the bands, together with a show of the yellow band above the green:
Yesterday’s move gave yet another boost to the 5-Day trade which, at the close yesterday (53.38), now carries an open profit of +493 pips. The 5-day low has now moved up to 50.72 (from 5.4.)