Crude Oil prices are gaining after a report by International Energy Administration (IEA) showed that demand will increase in the next five years with supply growing at a slower pace.
The report by IEA also showed that the United States would become the top oil supplier in the next few years as the country’s shale producers experience a boom. As you recall, a few years ago, OPEC members overflooded the world with crude oil to force the US shale producers out of business. At the same time, the producers worked to lower their costs. This enabled them to profit when oil price was below $40 a barrel.
Brent crude is now trading at $65.61 while WTI is trading at $62.67.
Technically, Brent has reversed to the 38.2 Fibonacci Retracement level. Today, with no major news expected, traders will focus on tomorrow’s inventory data from the EIA and the weekly stock data from the API.
In the short term, there is a likelihood that Brent may come down to test the $64 level which is an important support level. Alternatively, it may continue moving up to test the $67 resistance price.