Swimming In Oil
Today’s Spotlight Market
Crude Oil futures continue to fall ahead of inventory data from the API and EIA this afternoon and tomorrow morning, respectively. The supply glut has even overshadowed geopolitical risks to the Oil market. Reports on the escalation in the conflict between Ukraine and Russia suggest there are actual acts of violence and not simply troop movement and political posturing. Traders may want to closely monitor this situation. Libya is also experiencing difficulties. Exports at the Hariga oil port in eastern Libya were halted on Saturday when state security guards began a sit-in protest over unpaid wages. Also, the El Feel oilfield was shut down on Sunday due to a power outage. ?
Fundamentals
US Crude Oil inventories are forecast to have risen by 1 million barrels last week, as supply continues to outpace demand. Stockpiles are expected to have reached to 381.2 million barrels in the week ended November 7.? Traders may want to keep a close eye on the Cushing, OK inventory levels, as they could give traders a bit more insight into the possible short-term direction of the market. If Cushing begins to see substantial builds, this could be a sign that refineries simply do not have enough demand to keep up with supplies.? Iraq followed Saudi Arabia?s lead and reduced the selling price for US Crude Oil shipments, while raising the cost for Asian and European consumers.? Thus far, there has been little interest from OPEC member countries to trim output; suggesting US supplies will remain more than ample.
Technical Notes? -? View Today’s Chart
Turning to the chart, we see the December Crude Oil contract trading below the $80 level for over a week now.? The $75 support level can be viewed as critical support for the Oil market.? So far, prices have managed to stay above this potentially pivotal level.? The RSI indicator has slowly been moving higher, despite falling prices.? This could be interpreted to possibly be a signal that the market could be set to turn around in the near-term.
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