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LCrude: consolidates ahead of inventory data

Libya’s oil fields and infrastructure have come under attack and events have recently taken a turn for the worse. The pipeline attack led to a reduction in Libya’s oil production by about 180K barrels per day, likely bringing total production across the country to fewer than 200K barrels per day. Libya produced before the civil war 1.600K barrels per day.

Today we have the release of U.S. Energy Information Administration (EIA) latest survey. The report is expected to show a drop in LCrude stocks with estimates at 3.05 million barrels. A worse than expected (rise in stocks) can trigger push down.

LCrude fell 1.35% on yesterday session holding above the 10-day moving average but closing near the low of the day. The commodity is still in a bearish phase and is consolidating near a daily resistance. The Stochastic in showing a overbought market but even with the commodity well into overbought territory, we should not fight the strong upward trend.

Expecting upward move to a daily resistance at 55.84 on a break above previous day high at 53.37 (scenario 1) or a break below previous day low at 51.89 could trigger a push to a key level at 48.62.

LCrude is a CFD written over Light Crude futures.