Global macro overview for 09/05/2016:
Over the weekend, the 81-year old Saudi Arabian Oil Minister, Ali al-Naimi, has been replaced by former head of state-owned oil company Aramco (Saudi Arabian Oil Co) Khalid al-Falih. Some oil analysts had been expecting such a change though, but the fact that he is the close ally of Deputy Crown Prince Mohammed bin Salman and does not have any OPEC experience doesn't look so far like a smart move at all. As we remember, Saudi Arabia refused to limit global oil supply at the latest OPEC meeting and bin Salman will now take further control over the setting of oil supply policy, which means any further talks that might lead to an agreement in limiting global oil supply at the nearest OPEC meeting are almost impossible. The main reason why Saudi Arabia is resisting to limiting oil supply is the global war with the US shale industry: the cost of shale production is much higher, so lower prices make their main opponent uneconomical and more prone to burst.
Let's now take a look at the Crude Oil technical picture on the 4H timeframe. The market is still trading above the 21, 50 and 100 moving averages, in the congestion zone between two important levels: the swing high and technical resistance at the level of 46.78 and technical support at the level of 43.19. It looks like the bulls are still in control over this market and no signs of the exhaustion are visible just yet.
