- Yesterday´s US Inventories rose by 1.05M barrels
- Saudi Arabia boosted its oil production to a record high in July
- The monthly report from the OPEC the output of its members also hit a new high last month
- There are still rumors of an output freeze in the OPEC´s September meeting in Algeria
The oversupply in the oil market is real and this makes even more plausible the rumors of an oil output freeze in Algeria next month. This is why we remain slightly bullish trying to buy dips. Oil is down 1.45% for the week and practically flat for the month.
Yesterday after the US inventory numbers were released we saw a strong dip in oil prices below the 42.50 level which had been pivotal in the mid term on this particular asset. The break of this level did not changed our bias because we expected bull to take a breather before attempting to hit their targets at 44.50 and above.
Crude has now dropped 50% of this month´s rally right to our flagged area which confluences directly with the weekly pivot. Shorts will be covering, bulls will start buying. We are still in a short term drop, the bear structure is intact but we are seeing some bullishness at this level. We will consider buying this dip above 41.73 closely monitoring price action at 42.50.
Fundamentally speaking price should still be dropping with this oversupply in the market but because of a plausible output freeze in September and price action respecting these technical levels so well we remain bullish short-mid term.
Beware of this zone breaking and adapting
