The recovery has been attributed to the weakening of the dollar on Friday afternoon post a speech by Janet Yellen. Traders were also concerned about possible reduction of supply out of Libya where an armed faction has reportedly taken control of two major oil ports (Es Sider and Ras Lanuf).
In other weekend data, Baker Hughes reported an addition of 9 rigs in the US bringing the number up to 609. Speculators have, for the first time in weeks, cut their net long positions in WTI futures and options contracts. This is the first sign of reversal of interest in the market.
Saudi Arabia, has cut the price for Arab Light for deliveries into Asia in April, a recognition of the requirement to fight for market share.
The one significant change we can observe in the daily chart over the previous Friday is that the MACD has crossed over into negative territory at -0.08. If we couple it with last week’s crossover on the weekly charts and the fact that the weekly MACD still is in the negative zone, Brent prices look ripe for a fall. Thursday’s fall was in face of high volumes, an indication of the strong dip in bullish sentiment. On the daily charts, support is seen in the $ 54.75 – $54.90 range. Resistance can be seen at just above $ 57.00. On the weekly charts, we see yet another doji candle. Support is seen at around $54.00.
Gasoline prices also corrected a little. After plummeting to a low of just over $ 9 /bbl on Friday, the March crack is valued at $ 9.75 /bbl.
Fuel oil cracks also recovered. The sentiment, however, remains bearish as, there was a very nominal drop in stock levels despit a significant drop in imports. The March crack is valued -$ 3.95/bbl and April around -$ 3.9/bbl
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Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity