Global macro overview for 11/04/2016:
Baker Hughes updated its monthly international drilling statistics last week. Almost as usual, they revealed another drop in rigs drilling for oil. There is a 12 percent decline between February and March when there were 1,551 rigs active last month in the countries covered by Baker Hughes. This is the lowest number of rigs since September 1999 and down nearly 60 percent in a little more than a year. Nevertheless, there is one part of the world that is against this trend and drilling furiously to add the capacity needed when demand once again exceeds supply. Three countries on the Arabian Peninsula - Saudi Arabia, Kuwait and the United Arab Emirates - are almost at the near-record drilling rates. In conclusion, the number of rigs is getting lower, the storage capacity is getting rather tight in the USA, the stockpiles are dramatically increasing as well and there is no real deal at this weekend's Doha meeting where discussions were made about a possible coordinated output freeze.
Let's now take a look at the technical picture of crude oil on the H4 time frame. The golden descending trend line has been violated and the bulls have managed to reach almost 78% Fibo at the level of 40.47. Moreover, the market is still trading above 21,50 and 100 DMA, so possibly another rally might be made by bulls just to at least test the recent swing top at the level of 41.92. This is possible as long as the support at the level of 38.42 is not clearly violated.
