Crude Oil Today - Brent and WTI closing in on vital support

Market Analysis /
Greg McKenna / 10 Aug 2018

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


A stronger US dollar and continued worries about the impact of the trade war on global economic growth seem to have coalesced to keep the pressure on oil even after the big falls of 3%+ the previous day. WTI is down 0.33% to $66.71 while Brent is off 0.4% to $71.99. 


Here’s an interesting one.

Last night Switzerland said it regrets the “deteriorating” situation around the Iran sanctions from the US but recommended Swiss companies pursue their business with Iran on an informed basis. The pushback continues folks.

It is going to be interesting in November when the oil sanctions bite to see just how much Iranian oil buyers stop purchasing. If it’s the full whack of 1.5-2.0 million bpd then prices down here around $72 for Brent looks a snip. But increasingly it looks like other nations, including India – the worlds third biggest user of oil – may not play along in the manner the US Administration wishes.

Time will tell.  

For the moment the small falls overnight, after initial rallies, reinforce the bearish bias of both WTI and Brent.  

$70.77 is the target I have for Brent to test the bottom of the current trend channel while the 200 day moving average sits at $70.50. This level and the $71.25 region which was the break out for Brent when I talked about the $8-10 projection we saw to the highs becomes vital support. A break of the 75 cent zone above would suggest a $3-5 fall. WTI is likely to go along for the ride.

Here’s Brent. As usual I’ll respect the zone unless or until it breaks. WTI has similar metrics as I've discussed in this morning's video. 

Click on me, I'll expand
Click on me, I'll expand


On the day its CPI tonight in the US which is a monster number overhanging everything. The market is expecting 0.1% and 2.9% for headline and 0.2% and 2.3% for core. But before that we have plenty to get our teeth into. Japanese GDP for Q2 is out, the RBA releases its quarterly Statement on Monetary Policy, China releases loans data and money supply growth, and the UK has a raft of data out including Q2 GDP, manufacturing, inventory, and industrial production data. And of course Canada releases its jobs data.

Have a great day's trading.

Greg McKenna

Chief Market Strategist

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