OIL MARKET REVIEW AND A FORECAST FOR LIGHT SWEET CRUDE OIL, APRIL 7-11, 2014

Light Sweet crude oil?s (WTI) price was going up the whole week and got to $100.9/barrel on Friday.

WTI rates were supported by EIA report on stock of oil and oil derivatives that appeared to be much better than a forecast.

Gas stock dropped by 1.574 million barrels last week, while experts were waiting for the decrease by 1.086 million barrels.

Traders were happy with the data about the stock of raw oil that had decreased by 2.379 million barrels, while an increase by 1.086 was expected.

Stock of distillates increased by 0.554 million barrels, which appeared to be worse than the predicted decrease by 0.100 million barrels.

Improvement of the unemployment forecast combined with the cuts of the stimulus measures mean that economic situation in the USA is recovering, which will increase a demand for oil.

Let us remind that distillates sales go down when the weather gets warmer, as they are mostly used for heating. So it is recommended to pay attention to the changes of stock of oil and gas.

Another factor that supported oil was the improvement of the situation on the US labor market.

Unemployment level and the number of new jobs are usually published on first Friday of the month. According to the US Department of Labor 192 thousand of jobs were created in March, which appeared to be worse than a forecast of 200 K.

Meanwhile, February data was corrected towards the increase from 175 thousand to 197 thousand jobs.



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US economy shows good speed of new jobs creation, which increases demand for oil and oil derivatives.

Oil looks locally overbought from the technical point of view. Stochastic indicator gives a signal to sell. If $100 is breached, then oil can drop to $99.30, $98.60 and $97.94.

Oil can keep growing after the technical correction. Nearest resistance levels are located at $101.45 and $102.40.



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This information is an analytical review of Capital and FX markets. The material presented, and the information contained, is investment research and should in no way be considered as the provision of investment advice for the purposes of Investment Firms Law 144(I)/2007 of the Republic of Cyprus, or any other form of personal advice, which relates to certain types of transactions, with certain types of financial instruments.

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