Tomorrow we get the US Crude Oil inventory report

Tomorrow we get the US Crude Oil inventory report

The Oct Nymex Crude oil futures contract spiked to a high of $130 yesterday and closed at $120.92 off the low of $103.35. Don’t panic—the high is a function of the Oct contract rolling off into the Nov. Crude Oil Traders were massively short and since the contract was expiring, had to buy to cover. Oil should calm down today and the rest of the week-although it can still be an upside breakout. This morning at 6:15 am, the Nov Oil futures contract is down to $106.85.

Tomorrow we get the US inventory report, probably a crop in supplies due to production and refining cutbacks due to the hurricanes. This suggests prices could rise. But more interesting is whether oil traders buy back into the recession scenario that has “demand destruction” as its core theme, in which case we can hope for the oil price downtrend to resume.

Bye For Now

Barbara Rockefeller