Crude Oil Prices May Ignore Inventory Build on Rosy IEA Outlook

Talking Points:

  • Crude oil prices shrug off API data, arise on flushed IEA direct view
  • Incoming EIA register upsurge total doubtful to mangle momentum
  • Gold prices competence find opposing cues in risk trends, US PPI news

Crude oil prices shrugged off API information display US inventories combined 6.8 million barrels final week. Though a boost surpassed a 4.4 million tub build approaching from a central EIA information due after today, markets were clearly well-primed for a rave pleasantness of refinery disruptions from Hurricane Harvey and took a outcome in stride. Rather, a visual upswing saw a WTI benchmark deposit aloft after Friday’s plunge.

A flushed monthly news from a IEA seems to be charity oil a serve lift. The group upgraded a 2017 direct guess to a tip given 2015, citing clever ardour from Europe and a US even as Chinese uptake slows. It also offering an enlivening comment of OPEC-led prolongation cut efforts, observant reserve outward a conglomeration entirely complied with their share of outlay rebate for a initial time.

The news seemed to tip a beam in oil’s preference after opposing monthly estimates from a DOE and OPEC crossed a wires yesterday. The former lowered a direct projections while a latter nudged them upward. Barriers restraint upside follow-through seem to be comparatively singular in a nearby term. It would substantially take a dramatically vast EIA build good in additional of API’s projection to broach a turn-around.

Gold prices noted time as investors looked forward to incoming US acceleration data. PPI total are set to uncover factory-gate cost expansion accelerated for a initial in 4 months in August, attack an on-year rate of 2.5 percent. An upside warn echoing recently firming US news-flow competence boost Fed rate travel bets and import on a yellow metal, yet follow-through competence have to wait for higher-profile CPI information due Thursday.

Sentiment trends competence further emerge as a catalyst. SP 500 futures are indicating lower, hinting risk ardour competence cold a bit after dual days of generous recovery. That competence poke Treasury yields lower, boosting a relations interest of non-interest-bearing resources including a yellow metal. Incoming US CPI statistics competence dawn vast here as good however, tying sensitivity in benchmark lending rates.

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GOLD TECHNICAL ANALYSISGold prices are digesting waste after pang a largest dump in dual months. Support is in the1315.35-21.51 area (23.6% Fibonacci retracement, trend line), with a daily tighten next that targeting a 1295.46-99.25 section (38.2% level, double top). Alternatively, a pull behind above a 14.6% Fib during 1335.24 exposes a Sep 8 high during 1357.50.

Crude Oil Prices May Ignore Inventory Build on Rosy IEA Outlook

Chart combined regulating TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices continue to float nearby trend line insurgency capping gains given February. From here, a daily tighten next a Sep 11 low during 46.98 opens a doorway for a exam of a Aug 31 bottom during 45.57. Alternatively, a mangle above a Sep 6 high during 49.39 – a pierce that would also take out trend line insurgency – paves a approach for a plea of a Aug 1 tip during 50.40.

Crude Oil Prices May Ignore Inventory Build on Rosy IEA Outlook

Chart combined regulating TradingView

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

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