New front futures (Feb.) $37.62 up $1.48 (4.10%).
Yesterday's move on the API report, combined with today's on the EIA numbers is noteworthy because it wasn't just short covering, there are quite a few folks who want to own oil.Oil went on to settle at $38.10 on Thursday before the long weekend.
We don't but we also don't fight the crowd. Instead we'll be looking for a reversal next week....
Currently $36.79 down $1.31 and looking heavy, only 13 cents above the daily low.
A twofer from Barron's, first up, Focus on Funds
The post-holiday trading session is not being kind to crude, with oil prices giving back a big chunk of last week’s gains early on Monday.And from Barron's Wall Street's Best Minds column:
West Texas Intermediate crude oil prices slipped 3.5% to $36.74 a barrel in recent trading, while the U.S. Oil Fund (USO) dropped 3.3%.
Oil prices surged from recent lows last week, but can’t seem to muster a continuation of the rally. Supply and demand imbalances mean a fundamentally uncertain environment. OPEC is showing no signs of backing down from its production targets, and, increasingly, the markets are mulling how to deal with more supply from a new player — Iran.
The Wall Street Journal reports that supplies from Iran could add around 500,000 barrels after sanctions stemming from the nuclear deal, reached in July, come to an end. Bloomberg is citing local reports that Iran’s oil minister says the “priority is to boost shipments to pre-sanction levels.”...MORE
Could Oil Fall to the $20s in the New Year?
Normally we would not try to frame oil-market risk in any two week period, but this stretch through the beginning of January is special because technical analysts explain that West Texas Intermediate and Brent futures are trading perilously close to critically important support levels.Critically important, because if Brent were to fall through $34.55 or West Texas Intermediate (WTI), to below $32.40, there would be little in the way of crude-oil benchmark prices falling into the $20s per barrel.
That is not great, the more so since in this year-end low-volume trading stretch crude-oil markets can be pushed around with less effort.Another string of bearish datapoints, even backward looking ones, could further embolden already pervasive bearish sentiment (or persuade bearish inclined algorithms to keep on selling crude-oil futures).
And it may be a little less easy to prompt a few new waves of buying -- simply judging from the way the market has been trading in the last few weeks.In our view, significant new bearish news would have to emerge for oil to trade down through these key technical support levels and into the $20s....MORE