1. Key indicator to watch is whether Crude will be below or above 46.50 to 47 over the next 3 days. If it remains above then expect continuation of bullish channel. Else expect bearish drop to 42 by EOM.
2. Fundamentals are still bullish sideways: SA IPO, Venezuela, Horizontal drilling issues (breakeven costs, lack of financing, and production drops), weekly Crude draws and drop in inventory levels.
3. Strong producer hedging at 50 is dampening the potential upside on the channel therefore I am revising the top of the bullish channel to 53-54 from my previous target of 55 by Dec 31.
4. SPR will announce sales at end of Aug. But the 10Mbbl SPR sales for 2017 to fund the "Cures Act" are already completed. So SPR announcement will likely only be for 2018 sales. This will be a bullish announcement.
5. Market sentiment is bearish so sentiment may still overcome the fundamentals and continue bearish channel to cause steep drop to 40 to 42 by Aug 31.
2. Fundamentals are still bullish sideways: SA IPO, Venezuela, Horizontal drilling issues (breakeven costs, lack of financing, and production drops), weekly Crude draws and drop in inventory levels.
3. Strong producer hedging at 50 is dampening the potential upside on the channel therefore I am revising the top of the bullish channel to 53-54 from my previous target of 55 by Dec 31.
4. SPR will announce sales at end of Aug. But the 10Mbbl SPR sales for 2017 to fund the "Cures Act" are already completed. So SPR announcement will likely only be for 2018 sales. This will be a bullish announcement.
5. Market sentiment is bearish so sentiment may still overcome the fundamentals and continue bearish channel to cause steep drop to 40 to 42 by Aug 31.
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Just checked. There is still another 6.3M barrels of oil that is to be auctioned off from the strategic reserves in 2017. This will probably hit in Sep or Oct. SO we can expect another build in Crude due to this.