The IEA cut its projection for global demand growth in 2016 to 1.16 million barrels per day, but they also said that the crude oil output is declining rapidly in the United States.
Investors are cautious ahead of the meeting of large oil producing countries in Doha, Qatar on Sunday. Saudi Arabia and Russia will be there, too. They will try to finalize the agreement to freeze the oil output at January level. However there is skepticism among market analysts that the meeting will reach a good agreement.
Russian Minister of Petroleum, Alexander Novak said on Wednesday that the deal would be less binding with unspecified commitment. It signaled that the oil producing countries may not reach formal agreement to freeze the output.
Oil price made a technical rebound from the Fibonacci support area at 41.60-41.11. However the bullish momentum is quite low and the oil price actually is entering consolidation phase. Nevertheless, the price remains above 20 MA and 50 MA on hourly chart.
Hourly stochastic has crossed down and CCI is overbought. As today’s trading strategy, watch for bullish signal confirmation on a pull-back move to within the Fibonacci support area with target at 41.91 or 42.40 in extension.
Be careful if the price managed to break the support at 41.11 because it may turn the intraday bias to bearish and possibly will drag oil price lower to 40.76 or 40.31.