February crude traded sideways to slightly higher this week, building support above $50. The market couldn’t continue the trend higher that was seen the previous two weeks off the recent low of 42.36 from the end of December. This week’s inventory data didn’t add much support, but demand is improving causing some support. Also helpful for the market, the OPEC production number came in lower than previous months. Fundamentally the market looks to see some short-term weakness before stronger trade in the longer-term outlook. The government shutdown and no progress in U.S./China trade talks haven’t seemed to weigh on the crude market. Positive trade today is favorable for the bull camp, with trade over resistance at 53.30 needed for a breakout to the upside. The market looks to be back in a sideways channel between 50.55 and 53.30. The bulls are needing additional fundamental news to continue the trend higher. Momentum studies are showing overbought levels which would accelerate a move lower if support is broken.
Crude Light Feb ’19 Daily Chart