Crude oil drifts lower ahead of weekly stock report
Head of Commodity Strategy
Summary: Crude oil is jammed into a range despite several price-supportive developments. Focus now turns to this afternoon's EIA petroleum status report.
While the upside potential looks the greatest the market may still worry that disappointed longs my bail out following the failure to break higher. Much has been said and written about the head and shoulders formation on the charts and the failure for it to get triggered highlights the risk of technical trading patterns not working when they receive too much attention prior to the break. The key area of support remains $50/b.
Despite these oil-supportive developments the market remains stuck with the focus now turning to the ‘Weekly Petroleum Status Report’ from the US Energy Information Administration. Surveys ahead of today’s report at 15:30 GMT are in line the American Petroleum Institute with regard to crude oil and gasoline, both of which are expected to show an increase. Distillate stocks, meanwhile, are expected to show a drop in line with the seasonal behaviour.
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