Global macro overview for 20/07/2018
The Crude Oil prices are bouncing strongly after the comment from the Saudi Arabia Ministry of Energy. According to the ministry, in the second half of the year, there may be significant losses in domestic inventories due to the growing demand. The Ministry also informs that oil exports in July will be close to June levels, and in August it will shrink by 100,000 barrels per day. The latter information is surprising, as Saudi Arabia was expected to increase production significantly. It has been added that the country intends to “export only as much oil as it was ordered, and does not plan to provide anything above the customers’ needs”. This last sentence can be seen as an informal response to the appeal of President Trump, who wanted to increase exports to lower prices.
Saudi Arabia is one of the world’s biggest oil producer and exporter, so any information regarding oil might impact the global markets. This is why any comments from the Saudi Arabian ministry or other important officials should always be treated seriously.
Let’s now take a look at the Crude Oil technical picture at the H4 time frame. After the comments, the market has made a local high at the level of 70.16 before the price started to consolidate. The next target for bulls is projected at the level of 71.69 and if this level is violated, then the sequence of lower lows and lower highs will be interrupted. This means the larger time frame uptrend might resume and the bulls will try to push the prices even higher towards the recent swing top at the level of 75.30.