The agreement between the OPEC countries and Russia regarding the limitation of oil production has been going on for over a year and it can be said that the goals set at the beginning were achieved partially. First of all, the oil market was balanced, which was clearly supported by the global economic recovery. The demand for black gold remains strong, and the latest example is the data from India, where in January imports reached a record level of 4.93 million barrels daily, which means an increase of 13.6% compared to the previous year. As a result, global gas reserves, which dropped by 154 million barrels last year, are only 52 million barrels above the five-year average. This drop is supported by the stable ratio of excess demand growth over the growth of supply, which has been going on since the beginning of last year. As a result, the number of oil tankers off the coast of Singapore and Malaysia fell from 40 in mid-2016 to less than 15 in February this year. In addition, if they were filled to the brim before and they are not now. The second important goal of the cartel was the desire to change the price relationship in the futures market, so that the price of the raw material with immediate delivery was not lower than the price with deferred date of completion. This scheme is called contago and encourages oil storage. Currently, however, the price structure is reversed, what is called backwardation and makes the storage of oil for its later sale lose its meaning. Thus, OPEC may be happy with itself, but the main problem is the rapidly growing production in the US, which has already overtaken the export leader Saudi Arabia, and later this year may overtake Russia and take the place of the largest producer in the world. This means that the barely achieved balance on the market is fragile. In this context, the latest signals from OPEC are not surprised that there will be no sudden termination of the agreement, and work on a long-term form of cooperation with Russia is underway.
Let's now take a look at the Crude Oil technical picture at the H4 time frame. The market has bounced from the support at the level of 58.06 again and moved higher towards the level of 62.10. The momentum is still strong and points to the north, so there is a possibility of another rally higher if the level of 62.10 is violated. On the other hand, the nearest technical support is seen at the level of 61.08.
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