Crude Oil has reversed sharply from Monday’s high-flying session. We help provide a roadmap into today’s EIA inventory report and what to look for on the other side.
WTI Crude Oil (October)
Yesterday’s close: Settled at 75.53, down 1.89
The Crude Oil complex was weaker yesterday mostly on technical selling that drove WTI down -2.4% to settle at $75.53, October Brent settled down -2.3% to $79.55. Catalysts behind the sell-off look to be mainly technical. After the sharp rally starting last Thursday, the front month continuous WTI contract failed at its 200 Day Moving average (Shown below). Export markets continue to adjust to the loss of Libyan barrels as price divergences between Asia and Europe as the Brent – Dubai spread noted in our Energy briefing yesterday rallied $0.30 to settle at $2.87 but is weaker in today’s morning session alongside the rest of the crude complex. The longer-term supply / demand outlook for Crude Oil still looks to be structurally weak through 2025, but shorter term tactical long positions are attractive at solid entry points when the market grows complacent. Geopolitical risk remains an omnipresent catalyst for sharp rallies in this market and we remain patient and selective in our buying opportunities.
WTI Crude Oil futures are lower at the onset of U.S. hours and squarely putting emphasis on our Pivot and point of balance at 74.52-74.85, which aligns with the 50% retracement of the range from over the last week. While we do remain upbeat, the two-day selling is certainly a momentum killer and sticks the upbeat narrative on its back foot; only a close back above 75.80-76.18 will help negate such. However, continued action below our Pivot and point of balance opens the door to major three-star support at…
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