Crude Oil Today - Uptrend intact but price pulled back from important resistance

Market Analysis /
Greg McKenna / 03 Sep 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


Crude pulled back a bit with WTI pushing off resistance to fall to $69.80 while the Brent price sits at $77.64. Keep an eye on Libya though folks -the fighting has intensified again.


Russia’s output stalled at 11.2 million barrels in July, reports over the weekend show. That’s interesting when you put it in the context of the intensification of the battle in Libya which closed the airport in Tripoli last week and seems to have intensified over the weekend, the rapid fall in Iranian exports, and the continued tightness in inventories.

You see why prices have been in an uptrend.

But as I wrote last week I see a difficulty in maintaining these levels even as Iranian crude falls and the sanctions deadline looms, I struggle to see how prices can hold up if the global economy is about to be assailed by an all-out trade war. That comes with associated costs to the global growth outlook and thus in demand growth – demand itself perhaps – for oil.

What's really interesting about that is while Iran's exit will impact supply that needs to be put in context with the surge in US output which makes any demand issues from fragile growth outside the US all the more important. This tweet from Bloomberg's Javier Blas is spectacular in showing the rise in output from the United States.  

Source: Twitter Screenshot
Source: Twitter Screenshot

So it’s worth noting that WTI pushed back from the resistance I highlighted last week. Equally though it is also worth noting that the clear uptrend in WTI and rectangular trade in Brent remain the overriding imperatives of price for the two global benchmarks at the moment. 

So it's a question of time frame. 

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.


On the day today there will be some disruption as the US and Canada are out. But we still have plenty of data to get through. Here in Australia we get retail sales for July as well as more partials for Wednesday’s Q2 GDP release with business inventories and company profits out. It’s also Markit Manufacturing PMI day across the globe and that means we’ll also get the Caixin manufacturing PMI in China.

Have a great day's trading.

Greg McKenna

Chief Market Strategist

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