What is our trading focus?
OILUKOCT20 – Brent Crude Oil (October)
OILUSSEP20 – WTI Crude Oil (September)
XOP:arcx – Oil & Gas Exploration & Production
XLE:arcx – Energy Select Sector SPDR Fund (Large-cap US energy stocks)
Crude oil’s inability to respond to economic data and specific oil market news has seen both WTI and Brent crude oil continue to trade sideways within a narrowing range. The stability seen at a time where the OPEC+ group of producers have turned up their taps, has been taken as good news by some while others worry about crude oil’s inability to move higher in response to the recent dollar weakness and continued stock market strength.
The rangebound oil market has also seen the recovery in large-cap U.S. energy stocks stall with the SPY:arcx having outperformed the XLE:arcx by 15% since early June, when the impressive rally from the April low began to stall as WTI moved above $40/b.
Six days in a row WTI has now been rejected at $43 with the move above its 200-day moving average failing to trigger any technical buying interest. Support, as can be seen on the chart below, continues to move closer with the levels to look out for being trendline support at $41 followed by $40.35, the 50-day moving average.