U.S. investors were left feeling a little anxious on Tuesday after indices wiped out the strong gains seen at the open to end the day a little lower, but these worries may be quickly alleviated with futures pointing to another positive open on Wednesday.
WTI crude prices pulled back from a critical technical level after coming within a couple of ticks of the $62.58 per barrel high hit in May of 2015. Back then oil topped before a collapse in price as three bearish factors caused oil to fall. Fast forward to today. U.S. oil supply has been plunging at a record rate and should fall again for the 8th week in a row.
Most major markets are entering mathematically defined trending conditions. The euro, British pound and grain complex have the three most compelling technical conditions and may make the largest percentage moves from last week’s close.
We now have more evidence that the oil supercycle is underway, crude prices are on the rise as global demand and underinvestment in new oil projects are starting to take their toll on global oil supply.