Traders, keep an eye on oil


Oil is in the news today with crude futures at a potentially key level.

The main item came this morning from the U.S. State Department, which took a hard line against Iran. Washington is reportedly demanding that companies stop shipping oil from the terrorist state by the start of November. That’s a tougher stance than allowing a gradual phase-out.

The key points are potentially bullish for oil prices:

  1. Less crude on the market sooner
  2. President Trump is playing hardball with Tehran after scrapping President Obama’s nuclear deal.

Earlier in the day, two conflicting stories hit. First were worries about Libyan supplies getting disrupted (bullish for price). Countering it was a report that the Saudis plan to increase oil production next month. Those two stories now fade before the Iranian news. Remember that crude-inventory reports are due tonight from the American Petroleum Institute and tomorrow morning from the Energy Department.

Looking at the chart, crude oil futures (@CL) are back above their 50-day moving average for the third straight session. They’re also set for their highest close in a month. That could make some chart watchers look for the longer-term uptrend to resume.

Crude oil futures (@CL) with moving averages and potential support level.
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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them apprised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.