Global macro overview for 05/05/2016:
The crude oil Inventories data was released yesterday and it was better than expected. The market participants anticipated a slight downward revision of 600K barrels only after the 1,999K barrels build up in the last week, but the inventories rose to 2,784K barrels, its highest surplus in three weeks. Moreover, an oil summit in Qatar ended without an agreement on capping production, leaving room for prices to drop. The next OPEC meeting is scheduled for June 2 and the OPEC members will likely revisit the problem of freezing production again in order to raise prices. In conclusion, the worldwide glut of oil continues to weigh on oil prices and rising stockpiles might be the next issue for global oil production.
Let's now take a look at the crude oil technical picture in 4H time frame. The bulls managed to make another higher high (46.78) and another higher low (43.19), so the bulls still have control over this market. Moreover, the price trades above 21, 50 and 100 moving average without a sign of a bearish divergence. In conclusion, higher prices or at least a double top formation are expected in this market in the short-term period.