Oil bulls hit the brakes
WTI crude is down $2.88 to $62.33 after rising as high as $66.60 on Tuesday.
There is plenty of talk about Iran and the fallout from the US decision to tighten sanctions. That drove the gains early in the week but the bulls are concerned that Saudi Arabia appears to be opening the door to pumping more, rather than re-committing to OPEC quotas.
Trump also said that he "called OPEC" and asked them to lower prices, which is also weighing. With today's decline, crude is at a three-week low.
On the cross-currents, the Canadian dollar is holding up very well despite the drop in oil yesterday and today. Imperial Oil reported earnings today and cut Canadian capex by 30% despite the rebound in prices. That's not a good sign for the Canadian oil patch or the loonie.
One comfort for the bulls is that this looks like a typical bull market retracement. However for the bears, they will highlight the break of this trendline.
