Oil prices slip
Global markets stalled yesterday on several fronts falling to $85.27 in the US and $82.60 in London.
News that the Iraqi government would close the operations of the PKK appeared to be enough to avert the threat of potentially destabilising military action in the region by the Turkish government.
Forecasts suggesting that todays EIA data would reveal a build in crude stocks similarly served to help dissolve the overtly bullish tone to the market.
The EIA are expected to report a build in crude stocks of around 1mio bbls with a similar rise in distillate stocks. It should be borne in mind that the data series are often wildly divergent from these forecasts and any attempts to advance below the current support levels are unlikely to materialise until after the release of the numbers around 3.30pm Irish time.
The bearish tone to yesterdays trading was also assisted by US consumer confidence that fell to its lowest level for over a month, reflecting growing fears that higher oil prices - through gasoline & heating oil - would hit the health of the economy that consumes more oil globally than any other.
The rapid ascent of oil prices over the last week or so warrants a period of consolidation which we are undoubtedly witnessing currently. The uptrend is still intact and will remain so as long as the $82.40 support level holds.
The fragility of the demand-supply dynamic has been exposed over the last week to the extent that any retracement will be limited: geopolitical risk and the fortunes of the Dollar will undoubtedly weigh heavily upon the market as the key winter period apporaches.
Trading range today for Brent looks to encapsulate $82.50-84 with a slight bias to the upside.
