Oil market primed for inventory surprises

I am maintaining my overall view for the oil complex at cautiously bearish now that the spot WTI contract has breached its range support that has been in play since mid September. The new resistance level is the old range support level of $87/bbl. The battle continues between the negativity from the slowing of the global economy compared to what global stimulus programs might do to the economy going forward while geopolitics have continued to remain an issue for market participants.

I am keeping my Nat Gas price view at neutral as the fundamentals and technicals are once again keeping suggesting that the market may have topped out for the short term. I anticipate that the market will remain in a trading range until it becomes clearer as to how the heating season will evolve.

Markets are mostly higher heading into the US trading session as shown in the following table.

Best Regards,

Dominick A. Chirichella

dchirichella@mailaec.com

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