Oil prices are gradually decreasing. The new extension of the pact on the reducing of oil extraction by OPEC does not change the situation, as it was expected. OPEC's attempt to impact the market with the help of this agreement appears to be doomed amid news about constant increasing in the drilling activity in the USA (for the 19th week in a row), as well as the increasing of oil production in Libya which hasn't joined the agreement. At the same time, in order to achieve balance on the market and oil prices growth, it is necessary to reduce oil extraction by all countries-manufacturers. This is not happening, and the reserves of crude oil on the market are close to record levels. Thus, the supply continues to exceed demand on the market.
Despite the dominant number of negative signals on the market, the rates of oil continue in the frames of an upward trend, though it is solely by inertia and not based on objective factors. There're no perspectives for further growth at the moment. Most likely in the near future the upward trend will be changed to the flat one which has already been formed. The lines of support and resistance can be fixed at the levels of $44.5 and $54 a barrel mark CL/WTI.
Oscillators are neutral at the moment. Today investors are waiting for the data about oil stocks from the American Petroleum Institute. Investors expect a reduction of oil reserves that may support oil prices a bit. Therefore, in short-term trading you can open the deals to BUY, but in medium-term trading the deals to SELL can be more effective.
