Squawk / 08 February 2018 at 9:03 GMT
Head of Commodity Strategy / Saxo Bank
Denmark
Brent crude oil has reached its first technical target based on the Head&Shoulder breakout. Unlikely in our opinion to halt the market slide given the emerging focus on a seasonal slowdown in demand and run away US production growth and funds having to reduce longs amid the deteriorating technical outlook.
08 February
The Grinch The Grinch
Where do you see a potentially continuing slide finding its next resistance level?
08 February
Urum Urum
$55 - $56 former resistance for Crude I would guess
08 February
Ole Hansen Ole Hansen
In our Q1 outlook we highlighted the reasons for potentially seeing Brent crude return to $60 before settling into a $60 to $70 range. These reasons have if anything been confirmed during the past week. Rising US production leading to upgrades to 2018 non-Opec supply growth while demand growth could suffer from lower than expected global growth and the impact on consumption following a 50% rally since June. In the short term the combination of a speculative mountain of longs and a seasonal slowdown in refinery demand is likely to be the main driver.
Below $65 on Brent the next major technical level is $61/b, the 38.2% retracement of the June to January rally.
08 February
The Grinch The Grinch
Range seems reasonable in the longer term. However, a dip below $60 may be on the cards should Saudi start fighting back over lost market share.
08 February
Ole Hansen Ole Hansen
Natural gas stocks dropped 119 bcf to 2078 bcf last week (-112bcf was exp). The deficit to the 5-year average shrinks to 15.9% from a 17.5% last month

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