oil should be neutral or positive for the dollar today.

The Sept NYMEX crude oil contract closed up at $114.53 from $112.87 the day before, and traded as high as $115.36 overnight before claming down to $114.53 at 10:20 am GMT today. The chart shows oil is consolidative and broke the channel top, although it’s a new channel so we don’t need to worry too much just yet. The low is lower ($111.64 from $112.00) but the high is higher ($116.65 vs. $115.35), so the bar isn’t giving us a clear signal.

It needs to break the May 1 low at $110.30. The US inventory report is due today, probably a build in crude by 1 million barrels in the week ended Aug 15 from 296.5 million the previous week, according to the Bloomberg survey. Supplies of gasoline probably fell a fourth week, by 3 million barrels last week from 202.8 million barrels the previous week, also according to Bloomberg. The Baku-Tblisi-Ceyhan pipeline, closed since Aug 5, will resume operations next week, says operator BP.

On the whole, if the news comes in as expected, oil should be neutral or positive for the dollar today.

Bye for Now

Barbara Rockefeller