Oil bears getting back in control
Oil is lower for the third consecutive day. That's the first three-day decline since June 14-16.
The drop today finally found support around the May 10 low of $43.03, which is a level I've been highlighting for a week.
The low so far today was $42.97 but there wasn't much follow through on the break of the May low or the figure, so it's probably time for some consolidation.
The market is tentative on the Fed and US dollar today. It's the time of year when inventory numbers are choppy and hit-and-miss inventories have added to that theme for the past few weeks.
I suspect we will see a bounce here, so the question is: Where to sell it? I think somewhere in the $44-45 range is the spot to pick. The psychology on the market is turning and panicky oil companies are going to start hedging with refiners set for maintenance season.
We're into hurricane season now but there's nothing even on the NHC map so the coast is literally clear for the foreseeable future. That's why I expect bounces to be modest on the way back into the $20s.
