Oil Prices Hold Below 4-Year Highs- Market Still Well Supported
Jan, 17th 15:15
Oil prices pulled back from three-year highs as traders booked profits on Wednesday as analysts warned of a downward correction after prices gaining more than 13 percent over the past month.
Even after the decline, the overall oil market remains well supported on the back of tightening supply and strong global demand. The strong fundamentals lifted both crude benchmarks by about 13 percent from levels in early December. The rise has been helped by extended production curbs in OPEC and Russia, as well as healthy demand growth.
Big investment banks are raising their price targets for oil — or warning they may soon need to—as crude futures hit levels not seen since the early days of a slump in December 2014.
Bank of America Merrill Lynch and Morgan Stanley both upped their forecasts for crude prices this week, while Goldman Sachs said the risks of prices overshooting its current targets are mounting.
Brent crude futures fetched $69.17 a barrel. U.S. crude futures traded little changed at $63.77 per barrel after hitting a December 2014 peak of $64.89 on Tuesday.
On the technical charts, WTI crude is trading sideways, but above all the moving averages (9 day, 20 day, 50 day,100 day and 200 day). The RSI is at 70.15 and the MACD is above the signal line. Currently the market is expecting some correction.
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