The crude oil price broke out to the upside as European Union manufacturing data stunned analysts and give us a surge in oil. The February PMI gauge of Eurozone manufacturing activity came in at 56.0, compared to 54.3 that was the expected read. The rally happed despite a roaring dollar that was pumped on Fed talk that is trying to tell the market that a rate hike may be on the table at the next FOMC meeting. We will get U.S. manufacturing data today as well as more Fed speak but for now, the charts on oil are speaking for themselves.
Oil prices rose on Monday but gains were limited as investors gauged whether an increase in U.S. drilling rigs and record stockpiles might offset the existing push by producers to cut output and bring the market into balance.
Stock markets were explosively volatile this week, with most areas sprinting into record levels as the mixture of stabilizing oil prices and improving economic data across the globe boosted risk appetite.
Crude oil prices are hanging in a tight trading range as the market tries to balance record U.S. petroleum inventories versus an outlook for a global tightening of supply as OPEC lays the groundwork for an extension of production cuts.
Oil prices rose on Thursday after OPEC sources said the group could extend its oil supply-reduction pact with non-members and might even apply deeper cuts if global crude inventories failed to drop to a targeted level.
The crude oil market is wondering why the Strategic Petroleum Reserve numbers remained unchanged even as the Department of Energy announced that it had already sold over 6.0 million barrels of oil to a private concern, and they announced another sale of 10 million more barrels of oil by the end of this month. We know there is mandatory reporting of inventory shifts by the oil companies but is the SPR on the same reporting schedule.