Crude Still Stuck
Oil prices continue to tread water mid-week as the consolidation continues following the heavy declines we saw over the end of July. Crude futures shed around 17% from YTD highs as the market reversed the moves seen in response to news of the escalating violence between Israel and Iran and the subsequent US airstrike on Iran. However, the ceasefire announced shortly after that strike saw crude prices plunging as traders paired back supply-disruption fears. Since then, the market has seen 6 days of muted price action as traders await fresh directional drivers.
Fed & US Data
Looking ahead, traders will be watching US price action this week as the market braces for the latest US jobs data tomorrow. Dovish signals from the Fed recently mean that USD is poised to break lower if we see fresh weakness in the data. In this scenario, crude prices should find better demand. However, if US data surprises to the upside, traders will pair back near-term Fed easing expectations, pressuring oil as USD rises.
OPEC+ Expectations
Finally, traders will be keeping an eye on the upcoming OPEC+ output meeting. The group has recently hiked output levels steadily, continuing to undo the production cuts put in place over covid. The market is widely expecting the group to announce fresh increases to take effect from August which, if seen, should keep oil prices anchored lower for now.
Technical Views
Crude
The sell off has seen the market trading back down to test the 63.83 support level which is holding for now. While this area holds, bulls will be looking for a break back above 67.45 to encourage better demand. Below 63.83, focus turns to 57.42 as deeper support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.