As of Thursday afternoon, the July crude oil contract continued its turnaround which began Tuesday.  This followed an up Monday followed by a high of $72.90 on Tuesday, followed by yet another API which turned out to be the opposite of Wednesday’s EIA build in inventories.  While an API and EIA not matching have become the norm lately, it also did not help that there is talk of OPEC easing or eliminating the production curb quota.

Although this turnaround has occurred amid talk of managed money exiting their longs/booking profits and the market failed to test $73 per barrel; there is also a noted bottleneck with increased refining utilization and draws in distillates.

Looking ahead, we must wonder if the $70 level will hold as the market appears to have lost momentum and remains overbought by some indications along with bearish fundamental supply news.

Should this turnaround reverse and $73 be tested again, we have no recent resistance to act as support.  It will also be interesting to note whether the Brent WTI spread pictured below continues its uptrend or rolls over.

Crude Oil Jul ’18 Daily Chart

 

WTI vs Brent Crude Oil Spread Chart