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Friday's Market Minute: Oil Roiled By Fundamental Factors

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Friday's Market Minute: Oil Roiled By Fundamental Factors

Energy markets experienced a wild week, with the WTI crude oil futures contract down almost 7% since June 12.

There has been a great deal for oil traders to try to make sense of in recent days: increasing tensions with Iran (especially after reports of a U.S. ship shooting down an Iranian drone in the Strait of Hormuz yesterday), the effects of Hurricane Barry on the Gulf of Mexico, concerns about demand in the face of a bleaker global economic picture, and recent softness in equities. There also was this week’s somewhat puzzling EIA Petroleum Report, which reported a 3.1M barrel draw in inventories and yet still prompted a downward slide – perhaps due to heavier builds in gasoline and distillates.

Despite the mixed bag of fundamental factors for oil, recent price action has seemed more bearish from a technical perspective. WTI crude fell sharply below its 50- & 200-day SMAs after failing at a convincing upward move above the $60 resistance level. Prices are currently hovering near $56, which has often been a point of both support and resistance during the past year. If bulls fail to defend that price level, watch for support near $51 where we saw a double-bottom pattern form last month.

Information from TDA is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for illustrative purposes only. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Image Sourced by Pixabay

Posted-In: Crude Oil Oil TD AmeritradeNews Markets General Best of Benzinga

 

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