Brent Breakdown
Today’s Spotlight Market
Crude Oil futures remain weak, amid worries that supply will outpace demand for the foreseeable future. While the economic outlook for the US remains upbeat, the same cannot be said for China and Europe. Chinese Premier Li Keqiang announced money-supply growth was the slowest in five months, which can be attributed to efforts by the Chinese government to stem the tide of money-supply into the Chinese economy. Long-term, this is healthy for the Chinese economy, but has a strong possibility of hurting commodity prices near-term. The October Brent Crude Oil (BZ1V14) is trading below the $100 mark for the second consecutive session, which may drag down WTI with it.????? ?
Fundamentals
Yesterday’s American Petroleum Institute (API) report indicated that US Oil inventories shrank by 1.9 million barrels last week. It was a larger drawdown than expected, especially in light of the slight decline in refinery activity. The market may move around today’s EIA inventory numbers, which are forecast to show a drawdown of 1.5 million barrels. Trading may be lighter as the session moves on, as OPEC meets tomorrow and there is always an air of uncertainty as to what the cartel plans to do moving forward.? The US Dollar Index did pull back a bit, which could set a slightly bullish tone to trading. Also, it appears that the EU is holding off further sanctions against Russia due to its truce with Russia holding up to this point.
Technical Notes – View Today’s Chart
Turning to the chart, we see the October Brent Crude Oil contract in a steady downtrend since forming a relative high in late June.? Prices are trading below the $100 level, which is the near-term technical support.? Additional support can be found near the 96.85 level.? Despite the recent selling pressure, the RSI has managed to barely stay above oversold levels.?
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