The probability for a move into the 72$ price area continues to increase for crude oil | Forexlive

Last week, we got the news that Saudi Arabia was pushing for OPEC+ to maintain its faster pace of oil
production increases in the coming months, aiming to regain market share
rather than support prices. That news and other negative supply side news in the past weeks, have been faded over and over again in a sign that the market has factored that in and it’s now looking through
it.

The
thing to watch is the demand side now. We’ve been in a global easing cycle for some time now, we have the Trump’s tax cuts and deregulations ahead and the trade war looks now a thing of the past as expectations for positive outcomes remain the base case. These are all positive drivers for global growth and therefore for crude oil demand.

Note also that positioning in the crude oil market has been very bearish and we could see a quick squeeze into new highs once we get a breakout.

On the 4 hour chart, we can see that the price broke above the key resistance zone around the $64 area and it’s now going to challenge the major trendline around the $65 handle. This is where we can expect the sellers to step in with a defined risk above the trendline to position for a drop back into the $55 lows. The buyers, on the other hand, will look for a break higher to increase the bullish bets into the $$72 handle next.

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