 Hello, welcome to this week's CMC Markets Commodity Snapshot with myself Jasper Lawler. We're going to be looking at the price of crude oil, more specifically the West Texas contract that's traded through CMC Markets. That's based on the US futures market. Now all prices have pretty much been going sideways in the last couple of months after the massive declines that were witnessed in the tail end of last year and the beginning of this year. And so really it's been US oil production that's been the uncertainty here. US production is still increasing, but we don't quite know when that's going to end and that's something we want to explore a bit further here. Now there's been three main data points that have been key for watching that are released each week. One has been the rig counts, the big huge rig count on Friday. The other has been the American Petroleum Institute report on Tuesday in terms of inventories and then the most widely watched which is the International Energy Agency report on Wednesday. And so the general trend has been for a reduced rig count. In fact the rig count has been cut in half since November. So that should eventually feed through to a slowdown in production in the US, but that really hasn't been happening. The US production has been so high that it's reaching the point that we're getting to over capacity where there is literally no more storage to hold onto this oil and the risk there is that if storage literally does run out then some of this extra crude being produced is going to have to be sold off at fire sale prices and could bring the overall price down. So what we need to consider here is when does this increase in production start to taper off and there are starting to appear some signs of that. There is still a build in inventories but that build is slowing and so that's why we're seeing this base in oil prices and in fact we've seen a breakout into new 2015 highs so we want to assess the chart a bit here and see how much further we have to go. Now here we're looking at a daily candlestick chart for Crude Oil West Texas and what you can see here is that this pattern could be described as a falling wedge pattern which has subsequently broke out. The breakout point was on the 6th of April around $48 and the breakout was followed through and we've broken through the highs that were seen around February around $54 and so that's actually put us into new 2015 highs but we've stalled out just above that around this sort of 57 mark and now what's happening is that the price has fallen back to this prior resistance of 54 which could now be acting as support along the lines of what was once resistance then becomes support on the retest so this is our first potential layer of support before price could rebound and extend this price breakout but given the uncertainty over US production and whether it in fact is in the midst of moving towards a decline there is a good chance that we could slip back into this trading range and perhaps the round number of $50 might be an area again that needs to be tested before prices could push higher. Okay that's it for this week's CMC Markets Commodity Snapshot we're of course looking at oil prices the key thing here especially when you're looking at this US oil contract the West Texas is to pay attention to these weekly production figures and rig count numbers on Friday when the rig count is going down but what we want to see is the production numbers follow suit there are signs that that's happening but when it really does kick into gear that I think that's when we can safely say we've put a bottom into oil prices but as of yet that's not quite happened