Energy Prospectus

NEW YORK (Reuters) - Crude prices jumped about 4 percent on Tuesday after No. 1 oil consumer the United States cut output forecasts and Russia, Saudi Arabia and other big producers signaled joint action to support the market.

A weakening dollar added support for oil, aside from bets that the U.S. oil rig count could tumble again this week after last week's unexpectedly sharp decline of 26 rigs.

Traders also cited technical buying for Brent at above $50 a barrel as it headed for its first three-day gain in a stretch after Monday's rise of more than 2 percent and Friday's climb of nearly 1 percent.

West Texas Intermediate (WTI), the U.S. crude benchmark, rose $1.64, or 3.6 percent, at $47.90.

"We have reduced the probability of a return to the $37-38 area per nearby WTI," said Jim Ritterbusch of oil consultancy Ritterbusch & Associates in North Wabash, Chicago. "We will maintain a long standing view that price declines below this support level are virtually off of the table."

On Tuesday, the U.S. Energy Information Administration projected in its monthly forecast that the country's crude output will fall through mid-2016. The EIA also raised its 2016 world oil demand growth forecast to 100,000 barrels per day to 1.41 million bpd. (As I have been telling all of you for months now, EIA and IEA will keep raising their demand forecasts. When the final numbers come in (mid-2016), my guess is that global demand will have increased by 2.5 million barrels per day in 2015.)

Technical analysis > http://www.investing.com/analysis/crude ... ove-267278

The tide appears to be turning on Wall Street.

At 3PM ET: NEW YORK (Reuters) - Oil prices jumped as much as $2 a barrel on Tuesday, breaking out of a month-long trading range on a mix of technical buying and U.S. government data suggesting that the global supply glut could be ebbing.

Global benchmark Brent crude (LCOc1) rallied for a third straight day and was set to settle above $50 a barrel for the first time in a month. This convinced some dealers that there was little chance prices would slide back to the 6-1/2-year lows touched in August.

Early gains were fueled by a new U.S. government forecast for tighter oil supplies next year, and indications that Russia, Saudi Arabia and other big producers might pursue further talks to support the market. The rally accelerated above $50 on chart-based buying and a weakening dollar.

Brent (LCOc1) was up $2.40, or 4.8 percent, at $51.65 a barrel by 12:11 p.m. EDT (1611 GMT), breaking out of the $47-$50 band prices have traded in since early September. Its session peak, a penny shy of $52, was the highest since Sept. 3, and took three-day gains to more than 7 percent.

West Texas Intermediate (WTI), the U.S. crude benchmark (CLc1), rose by $1.75, or 3.7 percent, to $48.01.

"We have reduced the probability of a return to the $37-$38 area per nearby WTI," said Jim Ritterbusch of oil consultancy Ritterbusch & Associates in North Wabash, Chicago. "We will maintain a longstanding view that price declines below this support level are virtually off of the table."

Global oil demand will grow by the most in six years in 2016 while non-OPEC supply stalls, according to a monthly U.S. energy report that suggests a surplus of crude is easing more quickly than expected.

Total world supply is expected to rise to 95.98 million barrels a day in 2016, 0.1 percent less than forecast last month, the U.S. Energy Information Administration said in its Short-Term Energy Outlook. Demand is expected to rise 270,00 bpd to 95.2 million barrels a day, up 0.3 percent from September's forecast.

Russia's energy minister said Russia and Saudi Arabia discussed the oil market in a meeting last week and would continue to consult each other.

OPEC Secretary-General Abdullah al-Badri said at a conference in London that OPEC and non-OPEC members should work together to reduce the global supply glut.

Iran's crude sales were on track to hit seven-month lows as its main Asian customers bought less than before.

we definitely have breakout! an interesting technical tid bit------

that triangle wti just broke out of is a descending tri and is supposed to break down not up. just another data point that fundamentals reign over technicals.

all fwiw

jim