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As crude is traded sideways is it time for a bounce?

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What’s happening with crude? Last week we saw prices fluctuate by as much as 16%. This week we appear to be in a period of consolidation. Saxo's Ole Hansen says the markets have found support in the US rig count which is continuing to come down. But he also notes that Iraq raised production in December to a record high of four million barrels.

Hansen says there is increased speculative interest in crude from hedge funds and money managers as well as from retail investors through ETFs. He says that the gross long that we currently see in Brent is only just a little below the record of June 2014 when it was trading at just below USD 116 a barrel. He says funds and retail are moving in as they look for the bounce but he believes it may still be too early for that.