CRUDE OIL OUTLOOK:
- Crude oil prices idle as rally struggles to extend past four-month highs
- Supply squeeze worries counterbalanced by broadly risk-off backdrop
- US PCE inflation and ISM manufacturing survey in the spotlight ahead
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Crude oil prices oscillated sharply but ultimately failed to find a lasting directional lead Thursday amid conflicting influences. Lingering supply shortage fears – an upside influence – clashed with a generally risk-off backdrop felt broadly across the range of cyclically-minded assets.
Looking ahead, August’s US PCE inflation data as well as September’s ISM manufacturing survey are in focus on the data front. The Fed’s favored price-growth gauge is expected to put core inflation at 3.5 percent, down a hair from the 30-year high at 3.6 percent recorded in the prior month.
Meanwhile, the headline ISM figure is seen inching down from 59.9 to 59.6, suggesting that growth may be stabilizing after a pullback in the second quarter. In all, such data seems unlikely to alter traders’ disposition one way or another, barring a dramatic surprise. That might make for into another choppy but directionless day.
CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices are idling at three-year resistance just below the $77/bbl figure. A break higher may expose the closely-eyed $80/bbl threshold. A daily close below 72.17 looks necessary for sellers to turn the tide. Support levels at 69.36 and 66.35 follow thereafter..
Crude oil price chart created using TradingView
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--- Written by Ilya Spivak, Head Strategist, APAC for DailyFX
To contact Ilya, use the comments section below or @IlyaSpivak on Twitter
