Crude oil futures have had a wild ride this week with increased volatility, lack of direction and mixed fundamentals. Looking at the supply demand structure, we are still seeing current EIA oil stocks sitting at 436 m/b and the 5-year average is 427 m/b leaving supply adequate. The FED cut interest rates last Wednesday and with the 10-year yield at 1.99% and the 3-month at 2.06, the yield curve has been inverted for several months now and could indicate that we are headed into a recession in the next 24 months.  The technicals leave the market open to a potential washout into the low 50’s while the average true range is up at $1.68 meaning we see a $1680 range on a 1 lot everyday so use caution.

Crude Oil Sep ’19 Daily Chart

Phillip Streible

Early in his career Phillip began trading his own account as a screen trader focusing on the metals, grains and stock indices. He then became a Series 7 licensed financial consultant with A.G. Edwards. Later, he expanded his trading experience into a Series 3 licensed commodity broker with Investment Analysis Group. Most recently he was a senior market strategist at MF Global before joining RJO Futures in October 2011 as a senior commodities broker. As a senior commodities broker his goal is to show clients how to anticipate, recognize and react to bull and bear market conditions through the use of technical analysis techniques that help them to define risk.