Cup and handle pattern showing on WTI CRUDE.
Fundamental news of 12.8M real vs 2.8M estimate drawdown of US inventory jump starts the bull case for oil. Although there is resistance line starting from beginning of June, that trend has a short history and upcoming global events may help the break through this resistance. The G-20 summit is currently happening. With US/China trade war at an all time high, it is very hard to imagine an escalation resulting from this meeting. Rather a postponement or a reduction would be more probable, causing some stimulation in global economic outlook and thus higher oil prices.
Secondly OPEC+ will meet the following week. Saudi Arabia is still in the red and will have to do whatever it can to increase oil prices. Tensions with Iran/US is causing disruptions in supply. Though China seems to be using Malaysia as a conduit to circumvent sanctions, Iran's oil supply to the world will inevitably be reduced. Perhaps Saudi Arabia will make concessions at the OPEC+ meeting now and increase output later as Iran is forced to decrease supply. With major corporations dipping their toes in US shale, the US accounted for 98% of oil production growth in 2018 at mostly unprofitable levels. When the small players are driven out, the big players will likely decrease shale production.
Fundamental news of 12.8M real vs 2.8M estimate drawdown of US inventory jump starts the bull case for oil. Although there is resistance line starting from beginning of June, that trend has a short history and upcoming global events may help the break through this resistance. The G-20 summit is currently happening. With US/China trade war at an all time high, it is very hard to imagine an escalation resulting from this meeting. Rather a postponement or a reduction would be more probable, causing some stimulation in global economic outlook and thus higher oil prices.
Secondly OPEC+ will meet the following week. Saudi Arabia is still in the red and will have to do whatever it can to increase oil prices. Tensions with Iran/US is causing disruptions in supply. Though China seems to be using Malaysia as a conduit to circumvent sanctions, Iran's oil supply to the world will inevitably be reduced. Perhaps Saudi Arabia will make concessions at the OPEC+ meeting now and increase output later as Iran is forced to decrease supply. With major corporations dipping their toes in US shale, the US accounted for 98% of oil production growth in 2018 at mostly unprofitable levels. When the small players are driven out, the big players will likely decrease shale production.