Another week of restrained price action for crude oil, with the December futures contract closing at $103.84 per barrel, up just over $1.40 per barrel from Monday’s opening price. From a technical perspective the short term pattern seems set, with the commodity continuing to trade in congestion, moving between the $110 per barrel region to the upside and $101 per barrel to the downside, with this latter area now becoming key. It was tested twice this week, but held firm on both occasions, and clearly defines the support region in the short term. Any failure here will open the way for a breach of the psychological $100 per barrel and the next logical level at $97 per barrel.
Indeed with the increasingly well developed volume at price congestion regions now building overhead, the short term outlook for oil remains bearish, and for any recovery higher to be sustained, will need to be associated with strong and rising volume. The response to Wednesday’s wide spread up candle was muted, with the market opening gapped down this morning. It is perhaps a sign of the unpredictable times, that Wednesday’s oil stats, which registered a big build in inventories, saw oil spike higher.
Even the events in Syria seem to have lost their impact, and with virtually all markets now pausing and waiting for an agreement on the debt ceiling, the revised NFP and the ongoing Fed taper decision, all we can hope for is ‘normal service’ to be resumed at some point soon.
By Anna Coulling