Oil Forecast for the Week of February 13, 2017

Oil Fundamental Analysis – Forecast for the Week of February 13, 2017

Oil Forecast

The resilience crude oil prices showed last week suggests that there are plenty of investors around to provide support. Open interest remain extremely high despite the slight setback early last week. In hindsight, that move was probably designed by the hedge funds to shake the tree a little in order to drive out the weaker longs and set up the next buying opportunity.

The momentum into the weekly close could carry over into this week’s trade with early targets on the April WTI futures chart coming in at $54.96 to $55.16. Although the market is rangebound, taking out these two levels will put the futures contract on the strong side of the range.

As the OPEC output cut pledges near 100% compliance, I expect prices to rise, but in order to take out the most important top at $56.92 and sustain the move, we’re going to have to see more demand, especially for gasoline. Look for an upside bias this week, but also expect to see gains capped by concerns over demand.