Crude Rebound Off Of 3-Month Lows
Today’s Spotlight Market
While the U.S. is currently well supplied with Oil, gasoline and distillates inventories remain below the 5-year average. Distillate inventories fell by 1.798 billion barrels last week to stand at 124.923 million barrels, which is well below the 5-year average of 147.384 million barrels. Demand is also rising at 4.034 million barrels per day vs. just under 3.9 million barrels last year. Gasoline inventories fell by a larger than expected 4.38 million barrels this past week, which has inventories falling just below the 5-year average of 215.715 million barrels. Demand is running slightly above last year at 9.359 million barrels per day.
Fundamentals? -? Crude Prices have rebounded off of 3-month lows as oversold technical conditions and continued concerns over the upheaval in Iraq, caused weak shorts to cover positions. Oil prices have been weak of late as ample domestic supplies, 7.6 million barrels above the 5-year average, and a stronger U.S. Dollar have weighted on Oil prices.
On Wednesday, the Energy Information Administration or EIA reported that U.S. Crude inventories fell by 1.756 million barrels last week to 365.618 million barrels. While the decline in inventories was slightly below average analysts? estimates, U.S. inventories are running over 7.5 million barrels above the 5-year average. With political tensions in the Middle East and Russia rising, it may be difficult for traders to become overly short the Oil market with its ?bullish bias? towards political turmoil.?? ?
Technical Notes? -? View Today’s Chart
Looking at the daily chart for October Crude Oil, we notice prices trying to form a near-term bottom as prices trade near the 200-day moving average. Although the down-trend line drawn from the late June lows remains untested, the 14-day RSI has rebounded off of oversold levels with a current reading of 33.85. Thursday?s low at 95.88 looks to be near-term support? for October Crude, with near-term resistance found at 97.72.
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