Crude Extends Selloff After OPEC Revision — Eyes on EIA Report for Rebound Potential

I Crude oil moved sharply lower yesterday, breaking three support lines with ease to settle below most major support. Crude’s sharp move came after OPEC revised US production levels higher, pushing their estimated Q3 balance into a surplus. The weaker projection spooked a thin market, causing a sharp sell-off.

Estimates for today’s EIA report are as follows [thousand bbls]:

Crude: +5,202 estimate
Gasoline: -4,729 estimate
Distillates: -643 estimate
Refining Capacity: -0.60% estimate

US exports have been driving the sharper draws we’ve seen of late in the EIA report. We’re hoping today for another bullish EIA report that pushes price back above 60.

While yesterday’s move was an over-reaction, and crude is technically oversold here in the short term. Price below 60.00*** puts momentum back squarely into the bears court. We’d be weary of sizeable long positions in this environment.

Technical Analysis:

Prices sliced through most major support to settle within the 58 handle yesterday. The 58.08**** support level has held for now, and a run back towards 60.00*** could happen, but again, technically the chart looks broken at this point and momentum squarely favors the bears.

Check out the chart to this article: Crude Extends Selloff After OPEC Revision — Eyes on EIA Report for Rebound Potential - Blue Line Futures

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