WTI consolidates during 9-weeks near $53.00; odds favor bullish breakout

Today's expected FOMC meeting went out as a virtual non-event that left the US dollar vulnerable and in bad shape. On the other hand, commodities kept taking advantage over the latest developments as crude oil consolidates gains during the last 9-weeks.

 WTI pierced $53.00 post-EIA, keeps gains so far

OPEC and non-OPEC output cuts: Compliance 'relatively high'

Reuters reports, "Oil markets have been trapped in a range as traders wait to see whether OPEC production cuts can outweigh U.S. supply growth. Oil futures pared gains immediately after weekly U.S. supply data showed a much bigger build than expected, but prices rebounded. "U.S. crude could be in consolidation from $51 to $55 for a while until there's more evidence on OPEC production cuts or more evidence of production picking up or stabilizing in the U.S.," said Bill Baruch, senior market strategist at iitrader.com."

The report continues, "Russia cut production in January by around 100,000 barrels per day (bpd), according to data seen by Reuters. A day earlier, a Reuters survey found high compliance by OPEC with agreed cuts. [OPEC/O] "Any hopes of a sustained recovery in price will depend on increasing efforts by OPEC to curb output though the prospect of an upside breakout will be undermined by the budding revival in U.S. crude production," Stephen Brennock of oil broker PVM said."

Technical levels to watch

In terms of technical levels, upside barriers are aligned at 55.22 (high Jan.1), then at 59.60 (high June 2015) and above that at 64.30 (horizontal resistance). While supports are aligned at 48.00 (horizontal support), later at 42.20 (low November 13) and below that at 35.24 (low April 2016). On the other hand, Stochastic Oscillator (5,3,3) seems to change direction and head north as prices trade above 100-DMA and 50-DMA, therefore, the odds favor higher Oil prices in the near term. 

US dollar index erases daily gains after FOMC statement