Oil futures closed at their highest levels in 15 months on the Wednesday and the United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, is higher by nearly 15% over the past month.
Even with those superlatives, some oil market participants see more upside coming for crude.
OPEC plans to diminish output to a range of 32.5 to 33.0 million barrels per day from its current estimated output of 33.24 million barrels per day. While Saudi Arabia, OPEC’s biggest producer, has agreed to reduce output, Iran, Libya and Nigeria might not follow suit.
Obviously, production is a key element in the decision-making process regarding energy investments.
Currently, oil investors face conflicting reports regarding output. For example, Venezuela’s crude output is plunging to multi-year lows while Algeria is looking to boost production.
Rich Ross of Evercore ISI “noted that the commodity is testing the neckline of a head and shoulders bottom around $51 or $52. Technicians often view these patterns as a bullish reversal in trend,” report CNBC.