Welcome to Crude Oil Today, my brief look at what's happening in oil markets and what it might mean for prices.
As ever, feedback welcome
On commodity markets the rally in oil continued. A bit of that was the USD but the technical break and news a big Chinese buyer will be back for US crude helped drive prices around 1.5% higher. WTI ended the week at $68.72 while Brent finished at $75.82.
Last week was an incredible week of gains for oil. A technical break, a big draw in API and EIA inventory data, and then news the Chinese may be returning to buy US crude combined to see prices surge higher last week. WTI was up 4% while Brent rose 5.3% on the back of this combination of bullish forces.
Specifically, Friday Reuters broke a story which said “China’s Unipec will resume purchases of U.S. crude oil in October, after a two-month halt due to the [trade] fight”. That seemed to assuage some of the concerns traders had about the impact of the trade battle on demand.
But the reality is Brent broke it’s donw trend earlier in the week, WTI followed a day later busting significant resistance. So the news simply fit the path of least resistance in many ways. But, WTI ran into resistance at a previous peak with the high Friday of $69.28 just 6 cents or so below the resistance level I’ve been pointing to in my daily videos. That’s the level to watch.
And something else to watch, something that may become a handbrake on Oil price appreciation, is worries about what the yield curve is telling us about US and global growth. Here’s a tweet from Bloomberg’s Javier Blas.
Please note I talk about both Brent and WTI each day in my Markets Video.
On the data front we can ease into the week here at home. China is set to release industrial profits, then tonight we get the Ifo business climate and expectations data out of Germany, the Chicago Fed releases its national activity index, and the Dallas Fed manufacturing index. Given Robert Kaplan’s recent musings I’m expecting that to be pretty solid.
Have a great day's trading.
Chief Market Strategist
The information provided here has been produced by third parties and does not reflect the opinion of AxiTrader. AxiTrader has reproduced the information without alteration or verification and does not represent that this material is accurate, current, or complete and it should not be relied upon as such. The Information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any particular trading strategy. Readers should seek their own advice. Reproduction or redistribution of this information is not permitted
Ongoing rate curve repricing and risk asset reaction perfectly illustrate how worryingly reliant investors have become on easy money policies