Want to see something fantastic? If you got this one you had the key to Thursday. This square out symmetry hit very early Thursday morning on the crude oil chart. After all these years, I figured out exactly what this is. What I can tell you is financial markets have overcome a lot of intermediate level time windows to this point, the last of which is 721 weeks up from the 2002 bottom.
They said it could not be done, but OPEC and non-OPEC may go ahead and do it anyway. It is looking more likely to the crude oil trade that a deal to freeze oil production could get done. Last week it was Saudi Arabian energy minister Khalid al-Falih who signaled he was open to an agreement.
A year ago today the Bank of China shocked global markets by devaluing its currency and helped set up the environment for an oil market crash. While the oil market looks weak due to seasonal factors and high inventories, do we have the same situation a year later that can set up an oil market crash? I think not.
The first round of fundamental data hit the media airwaves mid-day with the release of the EIA forward projections followed by the API data late in the day. The EIA report was biased to the bearish side as they raised its estimated for U.S. production (see the charts below for more details).
The American Petroleum Institute (API), an industry group, reported a sharper-than-expected 2.1 million barrel rise in U.S. weekly crude stockpiles. As a result, hopes that the official data from the EIA would reveal a 1.3 million decrease – the first decline in two weeks – were dashed.