The CL technical outlook for last week called for a rally into the $49.20 - $49.75. The high of the week was $49.55 (July Contract) as oil continued the prolonged rally since hitting the lows in February 2016.
Rally Nearing an End?
On Thursday, the USD surged to its highest levels since mid-March on the news that the
Federal Reserve will likely raise interest rates at their meeting in June.
Also, there is some indication that the CL rally may be reaching a plateau as there are indications that the supply issues in Nigeria, Canada and Libya are nearing an end. Additionally, the Russian oil minister made a statement indicating that there may not be a production cut agreement between OPEC and non-OPEC producing countries.
Canadian Wild Fires
Several top Canadian oil companies are gearing up to resume production as recent damp and cool weather conditions have allowed Canadian firefighters to keep the fire away from two major oil sand production facilities. "The threat definitely diminished around the communities and the oil-sands facilities" according to Chad Morrison, Alberta's Forest Ministry's Chief Wildfire Official.
Due to the fire, several pipelines have been taken offline and nearly 1.5 million bpd of oil was taken out of the market as several major oil companies halted production.
OPEC Production Cuts
On Friday the Russian Energy Minister issued a statement indicating that it is unlikely that the OPEC and non-OPEC countries would agree to production cuts as production rose by 15,000 bpd which is an all-time high. The Russian minister also said that global supply is currently exceeding demand by 1.5 million bpd.
CL Technical Outlook - Weekly
Not much has changed on this chart since last week's review. We are still in a bullish channel but have found some resistance at the 61.8% retracement of the swing high of May 2015. Additionally, we are approaching overbought conditions on the RSI, which has been a good indicator for predicting turns. Overall Consensus: Bullish