Oil continued its gyrations overnight, bouncing around in a 3% range before settling where it finished the day before.
The US EIA produced a higher than expected crude inventory figure, but this was subsumed into OPEC gossip. With stories of countries declining to attend meetings, and then the Venezuelan President declaring the gaps were narrowing, we are well into headline trading season as November 30th approaches.
The CME has recorded record purchases of WTI call options this week, by speculators anticipating an OPEC/Russia deal, which probably explains quite a bit of Tuesdays price action. It is interesting that the speculators are long via options and not the underlying this time, no doubt bitten by previous oil long positions via futures turning from black gold into fool’s gold.
Although we open roughly mid-range in Asia this morning, the short-term technical picture is somewhat mixed. WTI must hold support lies at $45.00 a barrel with resistance at $46.30. Brent failed at $47.00 and was sold for the rest of the day. Support lies at the $46.60 a barrel area with a break suggesting a deeper retracing of Tuesday's frenzy.