At the end of the year, oil quotes periodically begin showing signs of stopping after a serious fall. It happened before in late December - early January in 2015 and in 2016. The same happened this year. The short sellers closed all their positions just below $ 50 / barrel of Brent crude oil, after which the asset grew in price to the $ 59-62 zone. Breaking through the level of $ 62 will be the most important task for the bulls. If they manage to do this, it will be possible to think about a turning point in the medium-term trend. But only if they manage.
Fundamental factors can always help. The effect of expectations of resolving tensions between the United States and China is already priced in the market. The next OPEC + meeting, will discuss a strategy to reduce oil production, and will take place only in February. In addition, the common goal of the cartel and the rest of the participating countries is to maintain the value above the 5-year average. Thus, even the current price level is likely to suit them.
Special importance must be given to the nearest news events this week. The consensus forecast for crude oil reserves for the sixth week in a row suggests a decrease of 2.5-3M. It is also worth paying attention to the stockpiles of distillates - they have doubled 2 times in a row since the beginning of the year. The reduction ofthose and other reserves simultaneously against the background of a decrease in the number of drilling rigs in the USA can be a determining factor for the bull market
At the end of the week the real price on oil will depend on the data that will be published on Wednesday and the interpretation of this data by big market players.