Ahead of the OPEC meeting, WTI crude oil even showed symptoms of uncertainty that led to weakening prices. Quoting Bloomberg, Monday (18/10) at 17.55 West Indonesia Time, the price of WTI oil for November 2016 delivery contract on the New York Mercantile Exchange eroded 0.22% to the US $ 50.24 per barrel.
In the past week, the price of WTI oil fell 2.16%. According to Deddy Yusuf Siregar, Research, and Analyst at PT Asia Tradepoint Futures, the results of the United States (US) oil stock report made the market falter.
Because Uncle Sam's country apparently has black gold-stock ready to sell up to 4.9 million barrels. Previously, US oil stockpiles were predicted to be only 0.4 million barrels. This triggers fears of oil flooding in the global market.
Because there was profit-taking after the previous week the price of oil reached its highest level. As if that wasn't enough, the Baker Hughes report said, despite having abundant stockpiles, the US actually intensified its oil production. There were at least four new drilling points in the US last week.
Excessive oil production does not only occur in the US. Nizar Hilmy, an analyst at PT Soegee Futures, said OPEC's oil production output in September rose again.
"Iran and Venezuela are the biggest contributors to OPEC," Nizar said.
Vladimir Putin and Igor Sechin
Uncertainty in oil prices resurfaced after Russian President Vladimir Putin and Chief Executive Officer (CEO) Rosneft Igor Sechin issued conflicting statements.
Rosneft is an oil company owned by the Russian Government. Putin and Sechin disagreed over Russia's participation in production cuts. But, there is still hope from Asian demand that could push oil prices up.
"Oil demand in India rose 4.4% last week," explained Deddy.
Until the end of the year, Deddy predicted, oil prices could move in the range of US $ 50-US $ 55 per barrel. If the OPEC agreement on production cuts is truly realized and obeyed by its members, the price of WTI oil can rise to the level of US $ 60 per barrel.
But technically, oil does need correction as it enters the overbought area. Prices are still rolling above the MA 50, MA 100, and MA 200. While the stochastic index tends to fall and read in the 45 areas.
Only, the RSI tends to strengthen in the 54 areas, also the MACD is still read in the positive area. Nizar projects that today (18/10) oil prices will strengthen in the range of the US $ 49.50-US $ 52 per barrel. While Deddy estimates, oil prices move between the US $ 48 to the US $ 51 per barrel in a week.
Kontan, Page-7, Tuesday, Oct 18, 2016
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