WTI Crude Holds Steady Near Key Support as Volatility Looms Ahead of Expirations and EIA Report

Barchart · 10/17 08:48
Bloomberg

Yesterday’s Close: Settled at 70.39, -0.19 [-0.27%]

WTI Crude Oil Futures are trading up +0.23 [+0.34%] to 70.63 this morning after a tame day yesterday. Crude has steadied after four consecutive days of declines. Last night, Chinese economic officials released details related to housing stimulus that failed to spark excitement—commodities, which had rallied into the announcement, largely pared gains.

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Last night, Eurozone YoY CPI came in weaker than expected at +1.7% vs +1.8% estimates and U.S. Weekly Jobless fell 19k to 241k and was lower than expected. 

The ECB cut interest rates 25bps last night, in line with expectations. The U.S. Dollar index is showing strength once again this morning  

Within options markets, significant open interest expires today which could fuel some volatility. Also slated for today is the weekly EIA report, estimates are as follows [thousand bbls]:

  • Crude Oil: +1,500
  • Gasoline: -2,000
  • Distillates: -2,500
  • Refinery Utilization: -0.50%

The API report released last night showed the following [thousand bbls]:

  • Crude: -1,600
  • Gasoline: -5,900
  • Distillates: -2,700
  • Cushing: 400

Monitoring of price action is key as WTI Crude Oil Futures sit right near a rare four-star support level of 70.10 – 69.83. In the short to medium term, we maintain a bullish outlook with a target of the 71.37 – 71.53 level. 

Yesterday, we noted that price action below our initial pivot and point of balance at 70.75-70.96 would likely keep the sellers in the driver’s seat and we moved our new pivot level to 70.65. While we continue to favor long positioning today, we have moved our pivot and point of balance lower to…

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