WTI oil market almost from the beginning of the year moves to the north as a result of which its price has increased by 45.92%. Given the previous two years of declines for investors those are very good news but not for us final consumers. So far it seemed that all lasting from January increases are only a correction of growth and in the near future market will return to previous bearish trend, and the price of oil again will fall.
As a result of the agreement reached by OPEC countries to cut daily production by 1.2 million barrels to a level of 32.5 mbd (million barrels per day) from January 2017 years and the agreement non-OPEC countries, which have signed an agreement under which will reduce production by 558 thousand. barrels per day there was a significant strengthening of price of the instrument. The mere fact of the signed agreement also gives the opportunity to continue growth in near future.
Looking at the weekly chart we see that as a result of these agreements, the market overcame an important resistance level around 51.00. We are now in area of local resistance 54.00 which if defeated could pave way for further growth even in the vicinity of the level of 62.00.
From a technical point of view on weekly chart we observe formation of an inverted head and shoulders (H&S), where mentioned earlier level of 51.00 is the line of the neck, which defeated opened the way for further growth. Given the range between the head and the neck we note that potential growth could reach even level of 74.00.
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