Oil market is starving for bullish signals

TVC:UKOIL   CFDs on Brent Crude Oil
The downside correction in the oil market is gaining momentum, with Brent crude prices came close to the $65 mark in Asia and hit a 2018 low on lingering concerns over surging U.S. output. The key question now is if prices stage a recovery from here, or dive under the psychological level and extend losses.
The recent bearish driver for another sell-off was the U.S. data. According to EIA , production climbed to 10.25 million bpd, and crude inventories also rose last week. The report added to the negative sentiment in the market which fears that the U.S. shale oil producers that are ramping up volumes at an amazing pace, could once again flood the market with oil and offset OPEC’s efforts to balance the market.
By the way, investors also start to worry about the cartel’s strategy due to a risk of an early exit from the deal on the back of healthy demand which is going to be robust this year, judging by a healthy economic activity globally. Earlier this week, Iran's oil minister said his country could raise its oil production within a few days should OPEC scrap the deal at the June meeting. This statement added to the negative pressure on prices and sparked fresh fears in the market.
In the current nervous and unstable background, Brent needs bullish signals to stage a recovery and escape further losses. Prices reached a key technical level $65, as a break below could attract more bears. Therefore, it is very important for the asset to kick off this mark and climb back above $66. But to do that, Brent needs positive signs from the USD, OPEC or the U.S.


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