18 Dec 2014
Oil rallies 3%, Sell-off seen as overdone
FXStreet (Mumbai) - Both Crude oil benchmarks climbed higher, extending gains seen in the Asian trading as the massive sell-off seen in the past week was seen as excessive.
Currently, Brent oil trades at USD 63.26/ barrel and WTI crude oil trades at USD 58.54/ barrel, both gaining about 3% on the day. Oil prices gained strength today also as Saudi Oil Minister Ali al-Naimi reiterated that it's difficult if not impossible for OPEC or Saudi Arabia to cut production and added "the market is passing through the temporary problem," which was caused mainly by a global economic slowdown.
Moreover, Russian President Vladimir Putin’s speech too added to the rally in oil prices. Putin said the Russian economy will rebound and the plummeting currency will stabilize while predicting the current crisis could last two years at the most. As he pointed out the economic performance will depend on the external factors and the recovery may come sooner should these change for the better.
Crude Oil Technical Levels
Brent oil has an immediate resistance which stands at 63.94 (Dec 12 High), above which gains could be extended to 65.37 (Dec 11 High) levels. Meanwhile, support is seen at 62.27 (5-day SMA), from here losses could be extended to 61.45 (20-day SMA) levels.
Currently, Brent oil trades at USD 63.26/ barrel and WTI crude oil trades at USD 58.54/ barrel, both gaining about 3% on the day. Oil prices gained strength today also as Saudi Oil Minister Ali al-Naimi reiterated that it's difficult if not impossible for OPEC or Saudi Arabia to cut production and added "the market is passing through the temporary problem," which was caused mainly by a global economic slowdown.
Moreover, Russian President Vladimir Putin’s speech too added to the rally in oil prices. Putin said the Russian economy will rebound and the plummeting currency will stabilize while predicting the current crisis could last two years at the most. As he pointed out the economic performance will depend on the external factors and the recovery may come sooner should these change for the better.
Crude Oil Technical Levels
Brent oil has an immediate resistance which stands at 63.94 (Dec 12 High), above which gains could be extended to 65.37 (Dec 11 High) levels. Meanwhile, support is seen at 62.27 (5-day SMA), from here losses could be extended to 61.45 (20-day SMA) levels.