Crude Oil futures are in a position to post a huge loss this week on renewed concerns over the global supply glut and as investors continued to express doubts that OPEC would be able to rally its members and a few key non-members to reach an agreement to reduce production.
The week began with talks in Vienna over the weekend, ending with participants failing to make it clear how much each individual member should cut. This meant that the regular OPEC meeting on November 30 will begin with virtually no chance for the cartel to come to an agreement about reducing production cuts.
Prices were hit again at mid-week after the U.S. Energy Information Administration (EIA) said crude inventories rose by 14.4 million barrels for the week ended October 28. Analysts were looking for a build of 1 million barrels. It was the biggest ever rise in U.S. crude stocks in a week, beating a 2012 record.
The crude oil market was under pressure for a sixth straight day on Friday after Reuters reported Saudi Arabia threatened to raise oil output steeply to bring prices down if Iran refuses to limit its supply.
December West Texas Intermediate Crude Oil
(Click to enlarge)
The main trend is up according to the daily swing chart. However, momentum is clearly to the downside. This week’s price action has also made $52.22 a new main top.
A trade through $43.77 will turn the main trend to down. This could create enough downside…