Earlier this week Oil broke $51 per barrel on the news the Russia would join Opec in the deal being finalised 30 November 2016. Yesterday price fell and is currently sitting just below $51 per barrel. Yesterday the IEA released their monthly oil report. The OPEC report is due today.

Highlights from IEA Report

Global oil demand growth is slowing at a faster pace than initially predicted. For 2016, a gain of 1.3 mb/d is expected – a downgrade of 0.1 mb/d on our previous forecast due to a more pronounced 3Q16 slowdown. Momentum eases further to 1.2 mb/d in 2017 as underlying macroeconomic conditions remain uncertain.
World oil supplies fell by 0.3 mb/d in August, dragged lower by non-OPEC. At 96.9 mb/d, global oil output was 0.3 mb/d below a year ago, but near-record OPEC supply just about offset steep non-OPEC declines. Non-OPEC supply is expected to return to growth in 2017 (+380 kb/d) following an anticipated 840 kb/d decline this year.
OPEC crude production edged up to 33.47 mb/d in August – testing record rates as Middle East producers opened the taps. Kuwait and the UAE hit their highest output ever and Iraq lifted supplies. Output from Saudi Arabia held near a record, while Iran reached a post-sanctions high. Overall OPEC supply stood 930 kb/d above a year ago.
The anaemic outlook for refining throughput extends further amid downward revisions to our 2H16 forecast. Refinery runs in 2016 are set to grow at the lowest rate in a decade.
OECD total inventories built by 32.5 mb in July to a fresh record of 3 111 mb. As refinery activities reached a summer peak, crude oil inventories refused to decline until an exceptional storm-related draw hit the US in late August.
Oil prices rallied in early August, rising from four-month lows near $42/bbl to briefly above $50/bbl amid peak summer demand for crude oil, which is expected to lead to the first quarterly crude stock draw in more than two years. At the time of writing, Brent futures had retreated to around $48.45/bbl while WTI was at $46.35/bbl.
Source iea.org for the full report go here

Price currently at monthly bull target (MM4) which coincides with $51 per barrel. Support is indicated below in the highlighted green zone, which marks role reversal support of the range breakout on 5 October, as well as the fib of the move from the swing low 16 September to swing high 10 October. Take note of the 21 and 55 showing bullish market and potential future dynamic support.

Price came off the 21 EMA yesterday and failed to make a higher high. Price then came back to the 21 earlier today and is sitting in the pivot cluster at $51 support is highlighted below in the green zones.

Price double topped in the highlighted area yesterday fell to support and then retraced to the 61.8% Fib which coincides with $51. Price then dropped back to support and has now risen back to the 61.8%. Therefore technically we are range bound. Taking the IEA report into consideration and the fact that the Opec deal has not been finalised, we might just see more selling. It is advisable to wait for a lower low or higher high to confirm direction or pay attention to price action at the top or bottom of the current range and use a breakout strategy. Also keep an eye out for the OPEC report due later today.

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