The oil drillers in the US started to reduce its activities ahead of talks about production restrictions among the world’s largest oil producing countries.
WTI oil prices rose about 0.6% after Friday rose by 6.6%, which is the largest increase since February 12. Based on data from Baker Hughes Inc., the number of active rigs fell for the 15th time in 16 weeks to the lowest level since 2009. Venezuela said that the first step in a meeting on 17 April in Doha among the suppliers included Saudi Arabia is supposed to limit production.
Oil price remains in upward trajectory for short-term to mid-term outlook. The oil price is testing intraday key resistance at 40.72. If the price managed to break the resistance, the oil price possibly will continue the rally up to 41.82-42.74.
Meanwhile, hourly stochastic and CCI are overbought. Correction may occur today. In that case, watch for bullish signal confirmation on a pull-back move to within the Fibonacci support area at 39.17-38.22 with target at 39.76 and 40.72 in extension.
Be careful if the price managed to break the support at 38.22 because it may turn the intraday bias to bearish and possibly will drag oil price lower to 37.54 or 36.67.