More Choppiness Ahead for Crude?
?? Fundamentals
Crude Oil prices have been extremely choppy in recent sessions, unable to find a direction. The market is higher this morning on a surprise drop in inventory levels and hopes that a budget deal can get worked out. President Obama took to social media, using his Twitter account to call GOP lawmakers out to work on a bipartisan plan.
The larger than expected drawdown in distillate inventories gave bulls something to hang their hat on. Despite the distillate drawdown being larger than expected, gasoline inventories jumped 3.87 million barrels versus a forecast rise of 900,000 barrels, which could rain on the bulls’ parade.
OPEC sees the Oil market as balanced, so there is little chance of targets being changed when the Oil cartel meets next month. All signs point toward a very well supplied Crude Oil market, so trading will likely follow outside markets.
?? Technical Notes
Turning to the chart, the January Crude Oil contract has been mired in range bound trading between 85.00 and 90.00 over the past month and a half. A convincing breakout out of either end of this range will likely determine the intermediate direction of the market. The oscillators are giving neutral readings, which gives some traders little to work with.
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