Oil: Potential toward $60 a barrel – BBH

Light sweet crude oil for December delivery rose 3.25% last week after a 4.7% advance the previous week as oil prices have risen in eight of the past nine weeks to trade at its best level since July 2015 near $55.75, points out the research team at BBH. 

Key Quotes

“The decline in US inventories and rig count, as well as signs that OPEC and Russia are likely to extend the output restraint for another nine months, (until the end of 2018) at the meeting at the end of November, are the main factors driving up the price.  The technical indicators are stretched, and the December contract closed above its upper Bollinger Band.   Although there may be potential toward $60 a barrel, we anticipate either consolidation or a correction first.  We peg initial support near $53.90.”