July crude oil made another new high for the move on Thursday, trading to 50.21 just before the US open. This is another new high for the year and crude oil is at a level not seen since October 2015. Follow through buying from the EIA report on Wednesday and another disruption in Nigeria set the early tone. Wednesday's EIA report showed crude inventories declining by 4.22 million barrels, Cushing inventories declining by 649,000 barrels, and a decline in US production to 8.767 million bpd. Nigerian militants continue to cause problems in Nigeria as an attack on a Chevron (NYSE:CVX) plant caused the company to shut it down.
Nigeria is moving more troops to the area and must stop the militants or face further shutdowns as the militants gain more confidence in their ability to stop production. Crude wasn’t able to maintain the $50 mark as sellers took control and crude traded to the low of the day at 49.22. Price has a tendency to back off after reaching round figure like the $50 level, especially when it has been a price level traders were hoping to reach. Crude oil settled at 49.48 and trade was stunted afterwards and it ended the day at 49.40. With a three day weekend coming up as we honor the men and women who died while serving in our armed forces, the question is do you want to hold onto your long positions or is a little lightening up in the cards?
CLH16
High - 50.21
Low - 49.22
Last - 49.40
Daily Pivots for 5/27/16:
R2 50.60
R1 50.00
PIVOT 49.61
S1 49.01
S2 48.62