oil output in September rose to an average of 10.74 million barrels a day, government data showed on Friday. Oil production increased 0.4% from August. The record-high Russian output adds to an already oversupplied global oil market. It is also the latest indication that Russia, one of world’s biggest oil producers along with Saudi Arabia and the U.S., isn’t prepared to join the Organization of the Petroleum Exporting Countries in trimming production to prop up prices. OPEC has indicated that it will only consider a cut if other big suppliers, like Russia, join it and several OPEC members have tried to woo the country. The fall in oil prices, which are down around 50% since last year, has battered the Russian economy, where oil and natural gas sales account for more than two-thirds of export revenue. The oil price slump, coupled with Western sanctions and a weakening currency, has already pushed the country into a recession which the World Bank expects to wipe 3.8% off the Russian economy this year.
The WTI Crude Oil market rallied slightly during the trading session on Monday to kick off the week, but we are right at an area where the market had sold off drastically so I do not think it’s going to be easy to continue going higher. That being the case though, it looks as if the inverted head and shoulders pattern is trying to prove itself, and therefore I like the idea of buying a pullback near the $55 level, and it could send this market much higher. This is a market that will continue to get a bit of a boost due to the greenback falling, and I do believe that we are going to make a move towards the gap at the $60 handle above. However, there will be the occasional pullback to offer value.