Crude oil prices are flat today - both Brent and WTI are currently trading sideways. Yesterday, crude oil prices traded in a wide range. While the commodity was selling off at the outset of the day, crude prices surged after Israeli Prime Minister Benjamin Netanyahu presented Iran's alleged program to secretly develop nuclear weapons. The accusations have been denied by Iran. Looking at Brent, prices initially jumped as high as $75.60/barrel. Later in the day, prices moved lower as traders took profits.
As we wrote in yesterday's crude oil daily update, recent down moves in crude oil have been accompanied by fairly weak trading volumes. As a result, bears are lacking in conviction and the technical outlook for the commodity remains bullish. On the other hand, the significant number of speculators betting on rising crude oil prices makes going long the commodity a fairly risky trade. With the question of Iranian sanctions in the background, speculators are also hesitant to go short crude oil. As a result of these dynamics, the commodity has been trading in a narrow range for the past week. Our short-term and medium-term outlook on crude remains bullish.
WTI is currently trading above $68.40. Brent crude is currently above $74.50.
Looking at US crude oil stocks, the most recent EIA figures (April 25) showed rising crude oil stocks and rising gasoline inventories. Crude oil inventories rose (+2.2m vs. -2.4m expected). Gasoline stocks were up (+0.8m vs. -1.0m expected) while distillate stocks (-2.6m vs. -1.7m expected) were down. Looking at reactions in markets, crude oil prices managed to strengthen following the EIA report.
As crude oil makes gains, we are now bullish on the commodity. Note that both Brent and WTI are trading within normal conditions. This is based on technical indicators on the daily chart.
As crude oil rebounds, we are upgrading the commodity to bullish in the medium-term. Looking at various technical indicators on the weekly chart, note that both WTI and Brent are trading within normal conditions.