Crude Oil Prices Talking Points:
- Crude oil prices[1] have swung lower once more as global growth concerns have spiked as more of the US Treasury yield curve has moved into inversion territory. Here’s why the US yield curve inversion matters to traders.[2]
- With the US Dollar[3] tracking Fed rate cut odds closely, it has in effect become a proxy for global growth and the US-China trade war: a strong US Dollar and strong crude oil prices means that the Fed won’t be as dovish; a weak US Dollar and weak crude oil prices means that the Fed will be more aggressive with their rate cuts.
- Retail trader positioning suggests that more USDCAD gains may be ahead.[4]
Looking for longer-term forecasts on oil prices? Check out the DailyFX Trading Guides.[5]
With the US-China trade war in a temporary state of détente – the United States’ 10% tariffs on $300 billion imported Chinese goods set for September 1 has been delayed until December 15 – global financial markets have seen violent price swings; crude oil prices are no different.
Oil Inventory Data Does No Favors for Crude Oil
Compounding global growth concerns was the release of the US Energy Information Administration’s weekly energy inventory update. Crude oil inventories rose by 1.58 million barrels against an expected drawdown of -2.2 million barrels. Oversupply concerns are nothing new, but in context of geopolitical tensions surrounding Iran and the Strait of Hormuz, the clear lack of demand for energy consumption by the world’s largest economy is doing no favors in an already-dour environment.
Crude Oil Technical Analysis: Daily Price Chart (July 2018 to July 2019) (Chart 1)
After failing to do so last week, crude oil prices are once
