Crude continues to consolidate
Crude oil was down yesterday, but back up this morning. Prices continue to consolidate in a relatively narrow range. This follows the sharp rally which began in early June, just after the sell-off in the aftermath of the OPEC/OPEC+ meetings at the beginning of the month. Prices have gone sideways over the past ten days, holding roughly in a $2 trading range. As far as front-month WTI is concerned, prices appear to have found a floor around the 100-day Moving Average, just above $80. Normally, consolidation after a sharp rally is to be expected. Often it provides an opportunity for the market to gather strength and build momentum for a continuation of the upside move. But oil’s consolidation is looking a bit long in the tooth now, and its daily MACD is beginning to flatten out. That’s not to say crude won’t rally further from here, only that it could just as easily turn lower now.
Yesterday, the US Energy Information Administration (EIA) reported a big jump in crude oil and gasoline stocks, compared with expectations of a significant drawdown in both. This indicated a drop in demand at the time of year when it is usually picking up due to the US summer driving season. Crude fell on the update, but now investors appear to have shrugged off any concerns.
Yesterday, the US Energy Information Administration (EIA) reported a big jump in crude oil and gasoline stocks, compared with expectations of a significant drawdown in both. This indicated a drop in demand at the time of year when it is usually picking up due to the US summer driving season. Crude fell on the update, but now investors appear to have shrugged off any concerns.
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