Global macro overview for 10/11/2016:
Yesterday's update on crude oil inventories surprised global investors by printing another higher than expected growth of US stockpiles. Market participants expected only a marginal increase to 1,050 mln barrels from the record high of 14,420 mln barrels earlier, but the figure released was at the level of 2,432 mln barrels. Moreover, the International Energy Agency (IEA) has commented today to Reuters, that in 2017 the global oil market will still struggle with the persistent supply growth, similar to 2016, and there's little evidence to suggest that economic activity is robust enough to deliver higher oil demand growth. The IEA keeps 2016 global oil demand growth unchanged at 1.2M barrels per day and forecasts the same rate for 2017. In conclusion, it is clear that only a coordinated action by OPEC and non-OPEC members might bring a significant change to the current situation, but so far all of the agreements have been unsuccessful.
Let's now take a look at Crude Oil technical picture in the 4H time frame after the data were released. The market is trying to bounce from the key support at the level of 43.00, but so far the rally looks corrective. The key level for bulls is the lower low at the level of 42.51 and only a clear and sustained break out below this level would change the outlook to bearish.
