Crude oil did not pass go overnight, with both contracts going directly to jail. Both Brent and WTI spot falling 2.20% and 2.60% respectively from their opening highs. Given that most of Friday’s rally occurred late in the New York session in the pre-weekend twilight zone, one suspects that the move down yesterday is more corrective in nature. Brent continues to outperform WTI relatively, supported by the backwardation at the front end of its futures curve.
OPEC’s technical committee meeting in Vienna gave out no new insights, but with compliance to the agreement falling, the lack of direction from them also weighed on oil.
Attention now turns to this week’s crude inventory figures tonight and tomorrow, with the American Petroleum Institute’s reading the first of the mark. The street will be looking for a continuation of the drawdown patterns seen of recent times to bring fresh buyers to the market. Disappointment could once again see oil bulls’ hearts broken.
Brent spot trades at 51.70 in Asia just below its 200-day average at 51.75. Resistance is now the Friday/Monday high and effective double top at 52.75. Support today comes in at 51.15 initially and then 50.60.
WTI spot trades at 47.20, below its 100-day average at 47.75 with again, a double top high from Friday and Monday providing formidable resistance at 48.75. Initial support rests at 47.00 followed by 46.45 with a break implying a deeper correction.