It is yet another time to reiterate the fact that is universally acceptable, the key fundamental aspect that drives any commodity behavior in the market (Demand/Supply equation has shown its prominence). We explicitly mentioned often and often that global demand and supply function plays pivotal role in oil prices in our post in recent past. Supplies from Middle East and indications of stronger global demand bother oil prices. The oil prices have raised as much as $10 this month. Turmoil in Yemen could disrupt the supplies from Middle East.Prince Abdulaziz Bin Salman Bin Abdulaziz, the deputy oil minister of Saudi Arabia, said on Monday that “the kingdom’s high oil production policy was based on the status of global demand.”So it can now be inferred that sustenance in the recent oil price rally requires firmer demand and a tangible supply response.Nervousness between Saudi and Yemen raise risk of production from the nation. WTI oil prices in the international markets rose by 3.6 percent and closed at $57.15 per barrel in last week.As the dollar index is strengthened, offsetting signs that U.S. shale output may have started to fall. The dollar rose 0.22 percent against a basket of currencies, making dollar-traded commodities such as crude oil more expensive for holders of other currencies as a result Brent crude reversed early gains to fall below $65 on Monday. Signs of a possible decline in U.S. crude output had lifted prices earlier in the day.In the international markets, crude prices are expected to trade higher probably towards $60 per barrel after correcting price manipulation slightly.Technical track:Weekly charting of WTI is signaling a sharp spike in prices as enough substantiation from RSI (14 day), and CCI (20) converging with price bands. While a cross over on fast stochastic at around 25 levels also suggests an oversold situation. All these put together a clear buy call on medium term perspective can be drawn on. Currently WTI crude (Jun 15) NYME is trading at 56.96 USD.
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