It’s been a month of congestion and consolidation for crude oil prices, with the commodity driven by a variety of forces, but as we approach the start of October, the market now appears to be building some momentum in preparation of an imminent breakout. However, much will depend on the deep areas of price resistance now directly ahead.
Not even the specter of a spillover of Islamic extremism from Somalia can dampen the atmosphere in Kenya, where commercial oil production is expected to begin in 2016 and discovery after discovery has made this the hottest and fastest-paced hydrocarbon scene on the continent.
Brent crude oil (BNO, quote) remained below $97 on Thursday as the growing supply glut continued to outweigh concerns about the conflict in the Middle East.
September’s been an interesting month of price action for oil traders, as the WTI contract (USO, quote) continues to bounce around, driven back and forth by a variety of forces as it continues to consolidate in a narrow range.
Oil traders hoping for a slow down in the bearish trend, to enjoy a relaxing weekend away from the screens, may have been tripped up by the Chinese (FXI, quote) data which slipped out on Saturday, with industrial production coming in at 6.9% against a forecast of 8.8%, missing the forecast by some distance, and whipping up the perfect storm.
Brent crude oil (BNO, quote) dipped below $101 on Monday morning after last week’s jobs data disappointed. The commodity traded at $100.81 at 4:50 GMT as investors worried about demand in an oversupplied market.
The short term rally for crude oil, came to a shuddering halt yesterday, as the December WTI futures (USO, quote) contract closed at $92.88 per barrel, having shed over $3 per barrel on the day, closing as a wide spread down candle on the daily chart.
Brent crude (BNO, quote) oil traded steadily at $102.10 at 8:10 GMT as the global supply glut weighed on prices.
Brent crude oil (BNO, quote) was steady on Wednesday morning after briefly rising overnight, but waning demand in both China (FXI, quote) and Europe (FEZ, quote) coupled with declining U.S. crude imports kept a lid on gains.
Oil prices continue to remain heavily bearish on the daily chart following the initial failure at the $106 per barrel area in early July which was the tipping point for the commodity, with the final phase of this particular price action, clearly marked with a shooting star candle and pivot high, coupled with high volume, and confirming the weakness at this level.
