Late in Friday trading, WTI crude oil rose as high as $102 before finishing the day back at $98. The trip lower has continued today, including a swift move in the last hour to extend the declines to $5 barrel. The low so far is $93.64.
The big event this week is the OPEC meeting on Wednesday.
A Reuters report last week citing 8 sources said production would be kept flat or boosted slightly. But that contrasts with a senior US administration official who said he was optimistic about additional OPEC oil supply after Biden's trip to the Middle East.
Fresh in the mind of market participants is how in May, there were many similar 'OPEC sources' stories who said there wouldn't be a production hike and then there ultimately was. I think some of the selling in oil today reflects those jitters and the sense that snubbing the President of the United States so quickly after a trip to the Middle East would be a snub-too-far.
In addition, we're at the turn of the month and there's some risk aversion kicking in. S&P 500 futures are down 30 points now, or 0.7% after last month's strong gains. Moreover, economic worries are a factor after generally soft global PMI data today, including from China.
That said, US gasoline prices have fallen for 47 straight days and sit at $4.17 with crack spreads narrowing and demand has picked up.
Overall, when I look at oil chart, I see a wedge forming with the extremes at $90 and $105. Where that resolves will determine the next lasting move in oil.
