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Crude Caught in Between
Oil prices continue to battle it out around the 82.59 level. Following a correction lower over the last two weeks, price has been attempting to get back above the level in recent sessions. Volatility around developments in the Middle East remains a key driver, as does the shifting Fed outlook and movements in USD.
Middle East Impact
In the Middle East, fading fears around Israel-Iran conflict have seen oil prices softening recently. With Israel taking limited retaliatory action against Iran, and Iran subsequently confirming they have no plans for further attacks, the situation has de-escalated for now. While this narrative remains, oil prices look likely to draw their focus from market supply/demand stories as well as USD moves.
EIA Data Due
Yesterday, the API reported a drawdown in oil stores of more than 3 million barrels. On the back of four prior weeks’ of inventory build ups, the news is a positive indicator that demand is picking up. Traders will now be looking to today’s headline EIA data to confirm the draw. If seen, this should help drive oil prices higher through the day.
USD in Focus
USD is also on watch here. A softening of USD would certainly help bolster a rally in crude today. With that in mind, traders will be watching the latest durable goods data out of the US, with any undershoot likely to see further USD selling ahead of tomorrow’s headline GDP data.
Technical Views
Crude
The rally in crude has stalled for now ahead of the 89.22 level with price subsequently reversing lower and trading back down inside the bull channel. 82.59 is the key pivot for price near-term. Back above here, focus returns to a test of 89.22 next. Below, and the bull channel lows and 77.64 area will be next support to note.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.