September Crude Oil (NYMEX:CLU13) reached a high of $108.93 on Friday before retreating. Today's session has a low of $107.88 and this will be closely watched for price action to maintain strength above here.
Japan's election results coupled with China removing the floor on borrowing costs have given an overall positive sentiment to global growth to start the week. At this point, positive news is priced in but needed to maintain this level of strength.
One thing to keep an eye on is that the WTI is now trading above Brent but as refining margins have fallen 65% compared to last month, look for a reversal in the spread (WTI trading below Brent once again) as a failure and a likely signal to a correction in the oil market. Only a close below $104.79-$105 will signal a further correction.
Resistance - $108.93**, $110.00***, $110.65*, $113.14***, $115.00**
Support - $107.88*, $106.91**, $104.79-105***, $103.85**