Tough to catch a trend in crude
No one ever promised trading was an easy way to make a living but it's especially tough in the crude pits over the past week.
Last Wednesday crude looked to be breaking down on a fall below the May lows but it promptly turned around in a three-candle reversal. The upside looked solid and then looked even better as the US dollar fell and oil inventories showed a smaller drawdown than expected.
But once again oil traders were given fits of whiplash as crude fell $2 after momentarily spiking higher on the inventory data.
WTI crude daily
I think the volatility is related to OPEC. Meeting started today and run through Friday, when production quotas are announced.
There are virtually no expectations for any policy changes but OPEC makes traders skittish and this could simply be a case of flows.
"There is consensus among Gulf OPEC countries, and others, to keep the ceiling unchanged," a senior Gulf OPEC delegate told Reuters late on Tuesday
Overall, oil seasonals are bullish and it's been tough to cap gains so I'm looking for a few more weeks of gains from here but I don't think it's safe to make a trade until after OPEC.
