Crude Oil Trapped In a RangePosted 08/30/2019 8:59AM CT |
Oil futures continue to trade sideways despite a hefty drawdown on Wednesday of 10 million barrels. I would expect prices to stick between $58 and $52 until some major shift occurs in the markets. This could either be a resolution to the trade war between U.S. and China, a sudden decrease in interest rates, or an escalation in tensions between the U.S. and Iran. Digging into the EIA data we are seeing current inventories at 427 million barrels versus the five-year average of 422 million barrels. Looking at the technicals, stochastics are steadily rising but the ADX is weakening. This tells you that the strength of this upward momentum is extremely weak and the 200 DMA at $56.96 should act as solid resistance.