Bears Get A ?Crude? Awakening As Oil Prices Rally
Today’s Spotlight Market
Weekly Energy Information Administration Energy Stocks Report (Week Ending Sep. 11)
Crude Oil: -2.1 million barrels to 455.9 million barrels
Gasoline: +2.8 million barrels to 217.4 million barrels
Distillates: +3.1 million barrels to 154 million barrels
Cushing: -1.9 million barrels to 54.5 million barrels
Refining Utilization: 93.1% up 2.2%
Fundamentals
While the talk of Oil price potentially falling below $30 per barrel have made media headlines, the Oil futures market is actually showing some signs that a bottom may be forming. The lead month October WTI futures are currently trading just above $47 per barrel as of this writing, which is nearly $10 above the lows made back in August. On top of the recent price rally, Wednesday?s release of the weekly Energy Information Administration?s (EIA) energy stock report showed a surprise draw in Crude Oil inventories as domestic production is finally starting to see some cutbacks as drilling rig counts fall. However, before one becomes too bullish on Crude Prices we should note that U.S. Oil inventories are still at multi-decade highs and Oil products, such as Gasoline and Distillates, saw larger than expected builds. Outside of Oil market specific fundamentals, market participants continue to ponder whether the Federal Reserve will finally act to raise the Fed Funds rate for the first time since 2006 with a ?punt? by the Fed on a rate hike viewed as a bullish scenario for Oil, as well as other commodities on the belief that the value of the U.S. Dollar will fall if the Fed postpones actions on interest rates this afternoon.
Technical Notes? -? View Today’s Chart
Looking at the daily chart for October Crude Oil, we notice an upside ?breakout? from the descending triangle formation.? Prices have remained above the 20-day moving average during the formation of the Triangle pattern acting as support for the past couple of weeks. Trading volume has also declined during this time frame, which is consistent in the formation of this consolidation pattern. The 14-day RSI has turned positive with a current reading of 54.32. The recent high of 49.33 remains as near-term resistance for the October futures, with support found at the August 28 low of 41.78.???? ?
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