Oil Remains Down Midweek
Oil prices remain firmly lower through the middle of the week with crude futures sitting down 16% off the week’s highs. Prices had already begun unwinding the initial spike higher on Monday, before news of the ceasefire broke. Since then, selling pressure has continued though momentum looks to have stalled today. The market is tentatively monitoring the situation and traders are acutely aware of the risks that the ceasefire breaks down. If the ceasefire an make it through the weekend, however, this should encourage hopes that the violence is done for now with crude prices likely to fall lower next week accordingly. However, if the ceasefire breaks down, crude is vulnerable to a sharp reaction higher on fresh supply disruption fears. As such, incoming headlines around the Israel-Iran situation will be key for oil traders near-term.
EIA Inventories Up Next
Away from the Middle East, traders today will be looking to the latest US crude inventories data from the EIA. Following the prior week’s huge 11.5-million-barrel drawdown bulls will be hoping for news of a further drawdown today which could help underpin prices for now. Obviously, the bigger focus will remain on the Middle East but a further drawdown surprise this week could turn some of the focus back to stronger demand in the US.
Technical Views
Crude
The sell off in crude has seen the market plunging back down to test support at the 63.83 level. This level is holding for now and while it remains intact, bulls can start to build back towards a fresh break above 67.45. However, if we slip lower here, focus turns to deeper support at the 57.42 level.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.