Today’s Spotlight Market
November Crude Oil futures continue to trade near the $90 level, as fundamentals play tug-o-war with the market. On one hand, the lack of geopolitical threats to supply, ample inventory levels, and a strong US Dollar weighed on prices. On the other hand, the US economy continues to show good job growth, which bulls are hoping will stimulate demand. Additionally, the market remains technically oversold, which could support prices in the near-term. .


It is difficult to predict upcoming US inventory levels, as the number of Gulf Coast refiners coming back online is unknown. However, traders may err on the side of larger builds. While the US job market continues to show marked improvement, the same cannot be said for the rest of the globe. German industrial output fell 4% from July to August, which is a significant decline for Europe’s largest economy. This was the largest month-over-month decline for the German industrial sector in over 5 1/2 years. Tomorrow’s EIA inventory report is expected to show US stocks increasing to the tune of 2 million barrels.? Gasoline inventories are expected to have fallen 500,000 barrels for the week.? Traders may want to keep an eye on the gasoline inventory numbers, as a bigger drawdown could be seen as bullish, even if Crude inventories themselves are larger than expected.


Technical Notes? -? View Today’s Chart
Turning to the chart, we see the November Crude Oil contract consolidating just above the 90.00 level. Prices failed to sustain a breakout above the downtrend line and were also unable to manage a confirmation of a small double-bottom, suggesting prices could continue to be in a downtrend.? This is further evidenced by the pattern of lower highs and lower lows.? The oversold conditions on the daily chart could be seen as supportive in the near-term.




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