Global macro overview for 10/04/2017:
Saudi Aramco (Saudi Arabian Oil Company) reported that it is lowering crude oil prices for its customers in Mediterranean area and Northwest Europe. As such, Arab Extra Light for May delivery will be $0.70 per barrel cheaper for buyers in Northwest Europe. Arab Light will be $0.45 per barrel cheaper, while heavy blends will cost $0.45-0.50 per barrel less. Buyers in the Mediterranean will enjoy even better discounts with Extra Light $1.05 per barrel less and other blends shaking off $0.50-0.70 per barrel. Saudi Arabia is the OPEC's largest oil producer and they are again starting the strategy of low prices. The reason behind this strategy might be explained by selling problems in the Asian zone as the prices for the USA are still without any discount. On the other hand, the oil demand in European countries is rising, so a discount for this zone might be another reason to secure this vital market. The next OPEC meeting has been scheduled for 25th of May in Vienna and the members of OPEC will ponder whether to extend the production cut deal into the second half of the year.
Let's now take a look at the Crude Oil technical picture at the H4 timeframe. The market has retraced almost 78% of the previous swing down before the internal pullback has happened. Currently, the technical resistance zone between the levels of 52.50 - 52.95 is the key zone for bulls as any breakout higher will open the road to the swing high at the level of 55.22. Nevertheless, please notice the market conditions are overbought and the growing bearish divergence suggests a deeper corrective cycle come soon. The next support is seen at the level of 51.50.
