Additional support came from gasoline which rallied to the highest level in a month on concern that refinery outages on the US East Coast helped erode stock levels in the Northeast US to the lowest since 1990 when the Energy Information Administration began keeping records. The delivery point for RBOB Gasoline (Reformulated Gasoline Blendstock for Oxygen Blending) is the New York harbour which helps to explain the price spike in this particular gasoline futures contract.
While the above mentioned factors have all been adding support to a market where speculative traders are still predominantly holding long positions, and as such are keen to protect these, we believe that the near-term outlook for demand will fail to provide support and make additional gains hard to achieve. This is basically due to the current level of global growth, combined with softer oil fundamentals heading into the last quarter. We believe that prices could eventually ease off and potentially average between 105 and 110 dollars per barrel for the remainder of the year.
From a technical perspective the 200-day moving average is currently at 112 USD/barrel (co-inciding with the average price of Brent crude year to date) and is the level to keep an eye on, as seen below.