The drift in oil prices continues as short term stability has the upper hand over uncertainty with exports from Iraq being maintained and added to by Libyan crude slowly reaching markets.
The surprising thing in a way is that the drift has been just that, it could have been much worse but the technical position is looking pretty dodgy, Brent is trading below its 200 day WMA which is distinctly bearish and really must hold above $108 to stabilise. Any panic by short term traders now would be very worrying as there is a lot of retail punting money in this commodity just now.
The inventory stats didn’t help much, admittedly crude stocks fell 2.4m barrels but gasoline stocks actually rose against forecasts of a fall and demand there was down 0.4%, but don’t panic too much it’s still 9.04m b/d being used! In contrast, it is worth noting that China increased imports of crude oil by 10% in the first half, if the economy is still sluggish I still contend that they are buying for inventory…
The FOMC minutes were ok, bond buying will finish in October but interest rates are expected to stay low indefinitely. In the UK we will hear what the BOE minutes looked like ahead of a likely rate hike before the end of the year.
The surprising thing in a way is that the drift has been just that, it could have been much worse but the technical position is looking pretty dodgy, Brent is trading below its 200 day WMA which is distinctly bearish and really must hold above $108 to stabilise. Any panic by short term traders now would be very worrying as there is a lot of retail punting money in this commodity just now.
The inventory stats didn’t help much, admittedly crude stocks fell 2.4m barrels but gasoline stocks actually rose against forecasts of a fall and demand there was down 0.4%, but don’t panic too much it’s still 9.04m b/d being used! In contrast, it is worth noting that China increased imports of crude oil by 10% in the first half, if the economy is still sluggish I still contend that they are buying for inventory…
The FOMC minutes were ok, bond buying will finish in October but interest rates are expected to stay low indefinitely. In the UK we will hear what the BOE minutes looked like ahead of a likely rate hike before the end of the year.
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