July Crude Oil sold off during the overnight session for Wednesday, June 1st, trading down to test trendline support at 47.71 trading to 47.75 as traders lightened positions ahead of today’s OPEC meeting. Positive comments by the United Emirates Oil Minister on Tuesday about the current rally in price were seen as an indication there would be no production freeze coming out of the meeting.
Iran also stated they wouldn’t be a party to a production freeze. The Russians, who are not part of OPEC and are not going to the meeting, also stated they would not take part in any production freeze. Then headlines through Reuters from an unnamed senior OPEC official about a hope for coordinated action on stabilizing oil prices sent price higher.
Crude rallied the rest of the day into the close and settled at 49.01. Then the API report came out at 3:30 CT with overall inventories rising by 2.35 million barrels on expectations of a 2.5 million barrel decline. This was countered by a larger than expected (500,000 barrel) decline of 1.1 million barrels at Cushing, Oklahoma.
Gasoline inventories declined by 1.48 million barrels. The surprise build outweighed the declines by a little as Crude traded down from the highs at 49.25 to 48.80. It ended the session at 48.91.
Keep you stops tight when you put on positions because trade continues be dominated by headlines, especially bullish headlines.
CLH16
- High - 49.25
- Low - 47.75
- Last - 49.01
Daily Pivots for 6/2/16:
- R2 50.17
- R1 49.59
- PIVOT 48.67
- S1 48.09
- S2 47.17