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
Some say it was stocks in the US falling, others that it was the slight miss of US GDP. I don't know but Oil was a little lower to end the week Friday. WTI dropped around 90 cents for a fall of about 1.3% to $68.69. Brent was more circumspect at $74.29, down 0.3%.
WTI has opened up 0.41% in Asia futures trade to be at $68.37 with Brent largely unchnaged.
Baker Hughes reported 3 more rigs were added in the previous week Friday. But that wasn’t the reason for the pullback in oil prices. Rather they seemed to get hit with a little bout of stock market risk aversion worry. That’s one hypothesis anyway. Another of course could be that if folks think US GDP at 4.1% is a cyclical peak then as good as it gets isn’t that good. That’s especially the case given that trade tension worries are still likely to impact overall growth down the line.
If I look at Bakers Hughes, at inventory levels, and US production it seems clear there is no lack of demand for US oil right now. That's the solid underpinning to the bid in WTI and oil markets more broadly.
So it's worth saying I'm not exactly sure what drove the moves Friday exactly and I hate fitting the narrative to the price action, so I’ll say anyone day's price action is just that, one day’s price action.
It’s driven by a myriad of inputs and so could be influenced by any manner of actual factors regardless of the “apparent” drivers. What’s more interesting to me is that Brent rallied last week but could not close back inside the old one-year uptrend line.
A rejection, or break, is a key indicator I’m watching for the next leg of the move in oil prices.
Here's the chart
On the day it’s quiet here at home. Retail sales are out in Japan, consumer credit (debt) is out in the UK along with mortgage lending data. In Europe we get Euro area data for business and consumer confidence and sentiment along with inflation expectations before German inflation data for July. Pending home sales and the Dallas Fed manufacturing index is out in the US.
Have a great day's trading.
Chief Market Strategist
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