The oil price has been on the rise and manage to reject the USD40 level. Currently it is trading at the 44.34 resistance level. From the technical point of view, I detect a drop is bull momentum. However, price action has not confirmed the weakness in price action and over bought condition has not prevailed yet. Should the Oil be able to break the 44.34 resistance level is the 46.50 and 48.50.
On the fundamental front,?sanctions were just lifted, in the middle of January on Iran. Their production was up 208,000 barrels per day in February and another 139,000 barrels per day in March. It is?expected their production to be up by from 500 to 600 thousand barrels per day by year?s end. However Economist?believe Iran will be the only OPEC nation with any significant production increase in 2016. Most other OPEC countries will be flat to down slightly.
Total oil production by OPEC members has also not shown any significant changes since 2015. This would not change the oil price drastically. Unless OPEC comes out with a strong statement stating a join cut in oil production, I do not see oil moving much beyond USD55 per barrel this year.
As usual, the fundamentals is my long term guideline. In the short term, nothing beats technicals and technicals tells me to look out for the WAWS areas given earlier on to detect weaknesses in price and act accordingly.