Crude is steady on Monday, after a busy week in which crude prices pushed above $61 before retreating. Currently, crude is trading slightly above the $60 level.
Crude oil has steadied on Monday, after declining over 1 percent on Friday. Currently, West Texas Intermediate crude futures are trading at $60.25, down $0.18 or 0.28%. Brent crude oil futures are trading at $66.01, down $0.02 or 0.03%. In economic news, durable goods orders were weaker than expected in November. The headline release plunged 2.0%, its worst decline since April. Core durable goods orders slowed to 0.0%, well off the estimate of 1.5%.
Crude posted six straight winning sessions, before hitting a wall and dropping sharply on Friday. WTI futures pushed above the $61.00 last week, for the first time since mid-September. The sharp drop on Friday can be attributed to profit-taking ahead of Christmas, as well as a report that showed an increase in the U.S. oil-rig count, which means an increase in crude supply and downward pressure on oil prices.
There were no surprises from Final GDP report for the third quarter, which was released on Friday. The third GDP release showed that the U.S. economy grew at 2.1% annualized rate in Q3, unrevised from the second release. This is a slight increase from the 2.0% clip in the second quarter and points to moderate, but consistent economic growth. The labor market and consumer spending remain strong, and the economy should continue to post growth rates of 2.0% or higher in 2020, provided that these two key sectors remain strong.
With a light economic calendar this week, I don’t expect to see many buyers entering the markets, which will be thin on volume and liquidity. On the upside, we find resistance at 61.00 line. Above, there is resistance at 61.50. On the downside, 58.50 is providing support. Below, there is support at 57.50.
Kenny is an experienced market analyst, with a focus on fundamental analysis. Kenny has over 15 years of experience across a broad range of markets and assets –forex, indices and commodities.
