Oil edged up earlier in the week on the news that Saudi Arabia is focused on cutting output and petroleum-rated assets rose across the board in spite of the fact that a report came out asserting the Russian's weren't cutting as much as they previously suggested. Breaking the upward risking wedge is a really bullish sign as rising wedges tent to be reversal patterns. However, we could just as quickly get back down into the wedge or start to ignore it all together.
We can also see industrial production, typically used a proxy for GDP growth, and its correlation with oil. Since we can use industrial production as a proxy for GDP, we can then surmise based on the data and based on economic theory (also simple logic) that the strong economic growth is, the higher oil prices will be given that demand for energy consumption increases when economic growth increases. As can be seen, oil prices fell off a cliff when industrial production flat lined back in November 2018. If GDP growth cannot pick up, oil prices will follow suit.
Keep in mind stochastic and RSI are both flashing sell. However, the primary reason for oil to increase is demand in the international market. If oil increases then its clear global demand is probably increasing too as supply side attacks from the major oil powers have mostly failed over the past few years to maintain high oil prices. If this is the case then, we could see a surge from a whole host of risk on asset classes like US stocks for example.
We can also see industrial production, typically used a proxy for GDP growth, and its correlation with oil. Since we can use industrial production as a proxy for GDP, we can then surmise based on the data and based on economic theory (also simple logic) that the strong economic growth is, the higher oil prices will be given that demand for energy consumption increases when economic growth increases. As can be seen, oil prices fell off a cliff when industrial production flat lined back in November 2018. If GDP growth cannot pick up, oil prices will follow suit.
Keep in mind stochastic and RSI are both flashing sell. However, the primary reason for oil to increase is demand in the international market. If oil increases then its clear global demand is probably increasing too as supply side attacks from the major oil powers have mostly failed over the past few years to maintain high oil prices. If this is the case then, we could see a surge from a whole host of risk on asset classes like US stocks for example.