Global macro overview for 12/02/2016:
The crude oil market became very violate yesterday after United Arab Emirates energy minister Suhail bin Mohammed al-Mazrouei made a shocking comment that the Organization of the Petroleum Exporting Countries (OPEC) is now ready to cooperate on crude production cut. The market reacted positively to rumors about Russia and OPEC cooperation deal, only to be disappointed when neither side committed. It was another rumor, that the main purpose was an attempt to stop sell-offs in the crude market. In conclusion, the oil market is now very emotionally driven and market participants should expect more volatility at the current price levels caused by rumors or unconfirmed information.
From the technical point of view, crude oil still looks bearish in the intraday time frame, but there is a visible double bottom pattern in the H4 time frame. Nevertheless, this pattern does not seem to be strong enough to stop the sell-off and it needs to be treated with caution as bears are still in control. Only a sustained breakout above the resistance level of 29.23 would put bulls back in control, but so far this level had been tested and refused. A down trend is still in play.