Crude Oil Today - Consolidation below important resistance

Market Analysis /
Greg McKenna / 24 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

QUICK SUMMARY

On commodity markets copper lost 1 per cent as the next tranche of $16 billion of tariffs were imposed overnight on each side of this US-China trade battle. That seemed to weigh on oil a little and balance out the positives of the technical break and the big draw this week. So the net-net is oil has consolidated the previous days gains to be the basically flat day on day at $67.87 in WTI terms and  $74.81 in Brent terms.

BIGGER PICTURE

So where does oil now go?

Yesterday I wrote the momentum was with the bulls but that essentially evaporated last night and prices are hanging near where they finished the previous day. Like the Wildebeasts on the edge of the river ready to jump in today's post picture that's a little ominous. 

It doesn't mean the rally is already ended. But it does mean the high’s I’ve identified in my daily videos have yet to be bested. So until these levels give way the moves higher are in hiatus.  

As I've highlighted above what seems to be going on - at least last night - is that the competing forces for higher and lower prices have met at a level the bulls and the bears have settled on. For the moment.

On the one hand the big draws in API and EIA crude plus the refinery run rate are a positive for prices. So to is the belligerence between the US and Iran and the sanctions that will loom in a month or two. But on the other side of the equation there are concerns about the trade war again, we have the US releasing crude from the SPR, and there's still some confusion about how much oil the Saudis and Russians will release once the sanctions are back in place.

I feel like I'll be writing that paragraph - or one very similar - for a while yet. 

In the meantime the chart of WTI below shows the level it has to best to kick on. Or reverse as may be the case. 

 

Here’s WTI.

 

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

 

 

Please note I talk about both Brent and WTI each day in my Markets Video.

DATA:

On the day it’s Kiwi trade, Japanese inflation, and Singaporean industrial production in out time zone. And the LibSpill political mess of course here in Australia. Tonight it’s Fed chair Powell at Jackson Hole as well as German GDP and US Durable goods.

Have a great day's trading.

Greg McKenna

Chief Market Strategist

gregmckenna.com.au

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