EOX Live Daily Energy
Energy Price Outlook
The sideways direction may continue in the oil markets today as the possibility of any trend development dwindles. Just as it has over the last two weeks, the sideways trend hasn’t been broken despite Hurricane Isaac, the Jackson Hole speech, and major ECB actions. There are still major events on the calendar over the next week including a Fed meeting and a Germany constitutional court ruling on the ESM, but oil seems to be locked into a two-way trend of push & pull. Support will come from tightening oil product stocks, lost Gulf of Mexico oil production, a potential strike on Iran by Israel, growing long positions in the COT data, and yesterday’s announced ECB bond buys. The negatives focus on resistance in WTI at $98.23, increased North Sea oil loadings in October, a potential SPR distribution, and a negative seasonal pattern in gasoline. The oil market is sitting at levels that are fairly priced in our view, so trading may remain difficult.