The American Petroleum Institute (API) U.S. crude stockpiles release showed a further increase of 2.4 mill barrels compared with last week’s additional 8.6 mill barrels. Not a large figure but higher than the consensus expectation, which was apparently looking for a draw of around 600,000 barrels. Enough of a build anyway to push prices down deeper into last week’s range, but still above its mid-point. Note that the EIA’s own release is due later today and this often differs significantly from that of the API.
We have already seen two days of oil prices at the upper end of last week’s range but with no further progress on the upside in spite of the Middle East tensions. Maybe price expectations were also softened by comments from Saudi Arabia’s council of ministers stating their commitment to balancing global oil markets and preventing regional conflicts.
There was also ,in my opinion, a rather unusual and strange comment yesterday from acting U.S. Defense Secretary Patrick Shanahan, who said that while threats from Iran remained high, deterrence measures taken by the Pentagon had “put on hold” the potential for attacks on Americans. Since there were no further details, one is left pondering whether this was real or just a(nother) timely political or market- oriented comment.
Either way, we are still without a trend and I am still only looking for short spurts of around 50 pips or so. I didn’t manage to find even that yesterday although it did end up scraping at least a few green ones. These periods of consolidation can be really frustrating unless one is naturally only trading short term. But for any swing trader, who is naturally looking for longer tranches, these jittery price movements can easily lead to price chasing and a series of false starts and an accumulation of smallish losses.
TA status is currently neutral on Daily and 4H and now neutral/negative on the shorter end. Price is pincered between the 4H 200SMA above it and the Daily 200SMA below it.
We can see here on the daily chart how the uptrend that started at the beginning of January (after last year’s collapse) has clearly stalled since the end of April and has been in a consolidatory range during all of this month so far.