The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
The strong supportive factor has been that estimates around OPEC (and select non-OPEC nations’) output have been coming down in the last two weeks, suggesting the market believes the agreed cuts to production will actually be adhered to. This focal point should get even greater attention in the lead up to the May OPEC meeting.
What we are seeing in the charts, though, is the bears taking control. The weekly chart of US crude is very interesting if we look at price action and the candle patterns. We can see this week candle failing to break above last week's high, with the sellers swiftly kicking in, and it certainly seems as though the price will close firmly below last week's low. From a weekly perceptive the key level is the January low of $51.34, so a weekly close below this level should be taken as a bearish development and opens up a nice move below $50.