Oil battles on to fresh 2016 highs

Oil has continued its comeback this week and the overnight session recorded fresh highs through $48.00bbls.

The high to date for 2016 was recorded overnight and then again in early Asia at $48.60 WTI bbls. A number of geo-political to market forces that are supporting the comeback.

USD reverses, oil rallies

The value of the dollar has reversed on the back of weak economic data and markets fearing the worst, pushing back a Fed hike while at the same time, the American Petroleum Industry reported a major drop in deliveries to oil storage facilities last month, another draw for this week's weekly survey (1.1 million barrel) and the excess of oil available on the market is reducing while in the US, overproduction is tapering off. Elsewhere there has been a disruption in oil supplies on a geo-political basis and volatility drives prices higher.

The recent break of the 200 dma at $39.95 was significant and the price could now be headed to challenge $50.88 8th Oct highs as next major target. $45.88 should offer support to the downside just below the 10 dma at $46.03.