Global macro overview for 14/07/2016:
The Crude Oil Inventories data published yesterday revealed lower than expected drawdown in stockpiles. Market participants had expected the inventories drain of -3,250K barrels that is more than -2,223K barrels a month ago, but the number of the stockpiles turned out to be at the level of -2,546K barrels. Moreover, in the interview in German newspaper Handelsblatt, the newly appointed Saudi energy minister Khalid al-Falih, said that the oil industry needs a price of more than $50 per barrel to sustain investments. Moreover, he added that the price above the $100 is too high and below $50 is too low to sustain investment, so the market should find the balance point somewhere in between. He also noticed a decrease in supply by roughly 1million barrels per day mainly due to the output drops in the United States and Canada.
Let's now take a look at the crude oil technical picture in the 4H time frame. Since the top at the level of 51.66, the market is posting a consecutive series of lower highs and lower lows, indicating that a corrective downtrend is still in progress. Currently, the price reversed down again after hitting the 100-period moving average at the level of 46.95 and it is heading to test the technical support at the level of 44.42 again. The double bottom formation is possible here.
