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Crude Oil: Inside week at a weekly support

Last week the International Energy Agency (IEA) report predicted that the global market would remain oversupplied through 2016.

And United States is endorsing IEA predictions thru its latest report that showed an increase in already high crude-oil stockpiles, adding to concerns about the global oversupply. The US Department of Energy surprised the market in a report showing that the country’s commercial crude inventories jumped by 7.6 million barrels last week, nearly three times as much as experts had predicted.

Since the beginning of the year oil prices fell more than 10.0% and is holding at a weekly support. Last week crude oil went back and forward with a narrow range week and close in the red near at the middle of the weekly range, creating an inside week. The commodity is in a recovery phase since the end of September and the stochastic is showing a bullish momentum plus is crossing upward the 50 mid line.

Expecting an upward move to a weekly resistance at 59.20 on a break above previous week high at 50.11 (scenario 1) or a break below the previous week low at 45.22 could push oil prices to year low at 37.74 (scenario 2).

LCrude is a CFD written over Light Crude futures.