Oil: Corrective phase may not be complete – BBH

The January 2018 light sweet oil futures contract snapped a five-day slide with a 1.9% advance before the weekend and news that Saudi Arabia energy minister endorsed the call for an extension of the output cuts may have helped spur the recovery, according to Marc Chandler, Global Head of Currency Strategy at BBH. 

Key Quotes

“OPEC meets at the end of the month.  The gain was insufficient to avoid breaking the five-week rally that had carried the contract from about $49.75 to nearly $58.15.  The pullback bottomed near $55.00 on November 14.  It consolidated until the pre-weekend recovery.   A band of resistance in the $56.60-$$57.00 area needs to be overcome to signal a test on the highs.  The technical indicators warn that the corrective phase may not be complete.”