Crude oil has change in trend
It remains to be seen what trend is setting up now in crude oil, but my new favorite 10/20/50/BB/CC technical indicators may give us a clue.
Fundamentally, oil supplies are still at record levels in the United States and globally. Traders are finally starting to take this into consideration. In addition, the Energy Information Agency (EIA) showed a third consecutive weekly decline in supplies of just over 2.5 million barrels. To me, anything less than 5 million barrels--whether it be a decline or an increase---is not a market-moving number. Anything from 5-10 million is a big market mover in my opinion.
As for news in the Middle East, this past week there was a takeover of the city Ramadi by ISIS which is only about 60 miles outside of Baghdad. We are seeing some push back now by Iraqi forces looking to destroy ISIS in the region. According to CNN, "After days of ISIS fighters advancing east out of Ramadi, an alliance of Iraqi forces opposed to the terror group say they've launched a counterattack--hoping to push them away from a key Iraqi military base and the country's capital."
The fighting in the Ramadi area has prompted thousands of civilians to flee in recent weeks, many of them to Baghdad, 65 miles (105 kilometers) to the east.
This is great news as they are doing this without the help of U.S. troops. However, none of this should have an impact on crude supply or prices. This has left the area with a major refugee problem. The map below shows the layout and how close these cities really are to each other.