Crude Oil Today - Support is holding again after a wild ride overnight

Market Analysis /
Greg McKenna / 15 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


Oil is mildly lower after a roller-coaster ride in the past 12 hours or so. WTI fell after the release of a bigger than expected build in API crude data. WTI is now at $66.70 while Brent is at $72.22 well off the highs overnight of $68.37 and $73.93 respectively.


There is much discussion about Saudi production right now in oil markets.

It’s something to watch because it seems to me that perhaps the Saudis are readying stockpiles for the exit of Iranian oil (South Korea reported yesterday it had cut imports from Iran by 43.5%) but the Saudis don’t want to tank the price in the mean time.  

Partly this debate about what the Saudis are doing is to blame for the exaggerated price moves right now.

And it’s clear we have geopolitics entering into the price as well with Turkey signalling that it will keep dealing with Iran as it and the Russians also work on a deal to settle trade in local currencies. I would have thought both these things were bearish for prices. And perhaps that’s what helped knock prices back from last night’s highs. There is plenty of action down here near important support.

And that’s been added to by the much bigger than expected build in API crude. That’s knocked both WTI and Brent substantially lower than where they were before the data showed the increase of 3.66 million barrels in the past week. At $66.63 for WTI and $72.17 for Brent prices are getting into the zone again. 

Here's the daily API chart - for more and a discussion of Brent please see my daily Vidoe. 

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


NAturally after the API and given where prices are sitting the EIA data is going to be very important tonight.

But before that, today Bank of Indonesia’s meeting and policy decision will take on a little more interest for developed markets than usual. Not many forecasters expect a move. But if it was me with IDR near the 2015 highs I’d nudge rates a little higher in the current circumstance to make the point “ I’ve got this”.

Before that though we get the Westpac consumer sentiment data in Australia as well as what’s likely to be another disquieting wage price index for the second quarter. Chinese house prices and FDI are out and then tonight Sterling traders will be on tenterhooks for July inflation data in the UK. All forex traders will be doing likewise when the US releases retail sales and industrial production data for July along with business inventories and the NY Fed Empire manufacturing survey.

Have a great day's trading.

Greg McKenna

Chief Market Strategist

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