The conflict between the U.S. and North Korea is a catalyst for today’s trading action. Short-term trading of WTI crude has been choppy, and for the 6th straight day in heavy consolidation. trend traders are struggling while range traders are putting up numbers.
It is tough to say what it will take to cause September WTI to make a directional move out of the $50.00 – $48.51 zone. We just have to stay tuned and wait for the break.
U.S. Crude Oil Inventories
Yesterday’s release of the API stats came in as a positive for the WTI crude markets. Today's EIA inventories came out surprisingly low. Still, the market did not tick higher, trading within value for the subsequent half-hour.
Here are the hard stats:
Event Previous Projected Actual
API Weekly Crude Oil Stock 1.779M NA -7.839M
EIA Crude Oil Stocks (Aug 4) -1.527M -2.720M -6.451M
As my colleague Arslan mentioned earlier today in his weekly trading levels for WTI crude, we are seeing geopolitical issues bring a considerable amount of action to the table.
EIA News Release- Finally Leaving Consolidation?
From a technical standpoint, there really is nothing much new to add. The area between $49.00 and $49.50 is the definite point of control for September WTI crude.
So, where do we go from here? It is anyone’s guess. Oil does not want to stray from the $49.00-50.00 level. We may have to wait for rollover to the October contract before a move.
Today's Plan: For me, trading crude today is simple. Tight breakout scalps around last session's high/low and wait for a definitive break. No sense in reinventing the wheel here. Safe trading until there is a confirmed break from compression.