Global macro analysis for 26/10/2016:
The Energy Information Administration will release the Crude Oil Inventories data today at 02:30 pm GMT and the global investors anticipate a shortage of 2 000k barrels (last week has a shortage of 5,200k barrels). Moreover, according to the Interfax agency, the Russia's envoy at OPEC, Vladimir Voronkov, said output cuts aren't "an option for us" and so Russia won't join OPEC to curb supply glut. This kind of comments around the production agreement/disagreement has been coming in and out from the financial mass media for the last month and this time might be no different. We all remember Iraq made it clear at the last OPEC meeting that they weren't going to make a cut in production and will allow the market regulate the oil prices in the near-term. OPEC Secretary-General Mohammed Barkindo said the 14-nation group is facing its toughest challenge after meeting Al-Luaibi for talks in Baghdad on Tuesday. In conclusion, the non-OPEC producers are trying to persuade the other members to join the cuts, but so far the talks bring no agreement.
Let's now take a look at the Crude Oil technical picture before the inventories data. After yesterday's comments from Voronkov the prices of oil dropped to the next technical support at the level of 49.13, so now oil is trading below all of the moving averages at this time frame. The bigger time frame trend is still bullish and as long as the gray rectangle zone between the levels of 49.13 - 48.44 (marked on chart) is not clearly violated, the trend remains bullish. The next resistance is seen at the level of 49.58.
