January 9, OctaFX – The price of crude oil gained sharply in overnight trading as Saudi Arabia announced plans to reduce supplies. This is in line with the statement released in December after the meeting of OPEC member countries in Austria.
Saudi wants the price of crude to be about $80. Another minor issue bullish for crude oil is the political instability in Gabon, which is OPEC’s smallest member.
This week, a group of armed officers attempted a coup, which failed. Investors are also bullish on crude because of the ongoing negotiations between the United States and China. Another reason is that the US stocks declined by more than 6.2 million barrels in the past week.
XBRUSD Technical Forecast
This year, crude oil has been an excellent performer, with Brent price rising from $50 to almost $60. On the hourly chart, the price of crude oil is above the 21-day and 42-day EMA while the Parabolic SAR points to more increases.
The RSI, continues to remain below the overbought level of 70 as the MACD continues to rise. There is a likelihood that the price will continue moving up as the market sentiment remains bullish.
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