The figures earlier from the IEA have been taken as a sign of recovering demand for oil and the prices has responded accordingly.
WTI is up testing $95 and since breaking back above the broken June 2012 support line is using it as support once more.
WTI daily chart 21 01 2014
Should we overcome the $95 handle then the 55 dma is waiting at $95.44 and this also marks an area of resistance from November last year around $95.60/75. We also have an interesting area around $98.50/90 as we have a trendline from August and the confluence of the 100 and 200 dma’s. I’m liking that area a lot for a short position. There’s also a case for a long trade off the support line with a stop on a break of the lows down at $91.45/20.
Brent has passed through the 200 dma at $107.08 and is heading back to the broken April support line at $108.85. Either side of it it faces the 55 and 100 dma’s at $108.51 and $109.07 respectively.
Brent daily chart 21 01 2014
Again, it’s a good mix of levels but I’m not as keen on it as the ones in WTI. I’m going to keep an eye on it and maybe have a small trade off it. Overall I still prefer a short strategy from higher up as I feel there’s still plenty of economic weakness about that should curtail big gains in demand.
There’s also been news that Turkey has discovered oil near it’s borders with Iraq. Energy accounts for roughly 25% of Turkey’s total import costs so any reduction they can get there will be very welcome and a good boost to the economy. The size of the find has yet to be calculated and even then will take time to get out of the ground. Still, if it’s sizeable then that may impact prices in the short term.