Trading position (short-term; our opinion): Short positions (with a stop-loss order at $48.56 and initial downside target at $35.24) are justified from the risk/reward perspective.

On Friday, crude oil lost 0.34% after the OPEC’s Monthly Oil Report showed that crude oil production increased by 188,000 barrels per day in the previous month. As a result, the commodity closed another day under the resistance zone. What’s next?

Today’s alert is going to be quite short, because crude oil didn’t do anything that would change the outlook on Friday. However, earlier today, crude oil’s futures extended gains and hit a fresh 2016 high after Goldman Sachs said the market shifted into deficit in May due to falling production. Nevertheless, despite this improvement, they still remain under the resistance zone created by the Nov 2015 highs and the rising resistance line based on the previous highs, which could stop further rally in the coming days.

As always, we’ll keep you - our subscribers - informed should anything change.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief

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