EOX Daily Energy
Energy Price Outlook
The weak tone of yesterday’s session indicates that oil prices may move toward the lower end of the two-week consolidation near $89.00 in the near-term. Focus will be on DOE inventories and ADP payrolls today, which may offer modest pressure. Pressure could also come from a lack of investment moving into energy markets at the start of Q4, concerns over global growth, and a slow pace of reform in Spain and Greece. Support may be found from favorable car sales reported yesterday, and relative strength in the euro. We’d look for prices to test support at $88.95 (Sep 26th low) over the next few days.
Yesterday’s action was mixed but finished slightly lower, with the market closing below resistance from the 50-day MA once again. WTI ended 59 cents lower while Brent finished 62 cents on the downside. The market received support initially from a report that Spain would ask for a bailout as early as this weekend. That was later countered by Germany and then by the Spanish PM himself who said that a request was not imminent. The early “risk-on” rally turned into a “risk-off” decline, but activity was relatively uneventful. The market traded in a small $1.32/bbl trading range on light volumes.
