For seven days there was a sideways range in the price of oil. A really boring phase for traders. But now it has clearly been broken through. This is clearly visible in the following chart, which goes back to July 15th.
Oil price finally moves again
The price of oil left its sideways trend during the night from Monday to Tuesday. From roughly 57 Dollars in WTI oil yesterday to this morning it went up to 58.27 Dollars. Yesterday at 7pm German time the oil price rose quickly from 57.20 to over 58 Dollars. Commentators in the USA see this as a fundamental reflection of the hope that the trade war will be defused. But even more they want to have seen an important chart technical mark at 57.50 Dollars, which was reached and then jumped strongly upwards.
Last week, oil inventories were unable to move the price of oil. Unlike in the weeks before, when according to the inventory data the prices reacted clearly! What will happen today at 4:30 p.m. when the official EIA inventories are released? We can be curious. As a preview, the privately determined API inventories were published at 10:30 p.m. yesterday evening. They show a drop in crude oil inventories of 6 million barrels. This news could stabilize the increased price level overnight. Will this data be confirmed today at 4:30 p.m. and is there another upward surge in oil prices? Or will the data be ignored, like last week?
Two important events today
But yes, of course the oil price is currently also being slightly boosted by the imminent interest rate cut tonight in the USA. But if there is no signal for further interest rate cuts (firing up of the economy), the euphoria about shares and oil could quickly be over again! So, the oil trader is watching the oil inventory data today at 4:30 p.m., and then tonight, of course, the Fed‘s decision. Besides the expected 25 basis point cut, it will be important to see if there are any signals that Jerome Powell will cut interest rates any further.