Crude Oil Futures: Rising odds for further consolidation

CME Group’s flash data for crude oil futures markets noted traders extended the uptrend in open interest for the 4^th session in a row on Thursday, this time by around 12.4K contracts. Volume followed suit and rose for the thirds straight session, now by around 63.1K contracts.

WTI remains focused on $90.00 and above

Prices of the WTI extended the weekly recovery on Thursday. The small uptick was in tandem with increasing open interest and volume and opens the door to some consolidation in the very near term and with the immediate target at the $90.00 mark per barrel and beyond.

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Silver Price Analysis: XAG/USD fades rebound from 10-DMA above $19.00

Silver price remains sidelined after bouncing off 10-DMA.

Bullish MACD signals, firmer RSI keeps buyers hopeful but upside remains elusive below the descending resistance line from June.

Multiple supports to test bears before the yearly low.

Silver price (XAG/USD) seesaw around $19.15-20 during early Friday morning in Europe, fading the early Asian session bounce off the 10-DMA.

The bright metal’s latest inaction could be linked to the inability to cross the 50-DMA hurdle, around $19.25 by the press time. Even so, the bullish MACD signals and firmer RSI (14), keep the XAG/USD bulls hopeful.

That said, a downward sloping resistance line from June, around $19.90, appears a tough nut to crack for the bulls.

Following that, the 100-DMA level surrounding $20.35 acts as the last defense for the XAG/USD bears before directing the price towards the previous monthly peak near $20.90 and then to the $21.00 threshold.

Alternatively, pullback moves may initially aim for the 10-DMA support level of $18.90 before directing sellers towards the multiple supports around $18.25 and $18.10.

In the case where silver sellers keep reins past $18.10, the $18.00 round figure and the yearly bottom near $17.55 will be in focus.

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Crude Oil Edges Higher; China Stimulus Boosts Sentiment

Oil prices edged higher Thursday, on course for strong weekly gains as China attempted to boost demand while global supply remained very tight.

By 08:40 ET (12:40 GMT), U.S. crude futures traded 0.1% higher at $94.94 a barrel, while the Brent contract rose 0.4% to $101.67. Both contracts are on course for weekly gains of around 5%.

U.S. Gasoline RBOB Futures were up 0.2% at $2.8053 a gallon.

The Chinese government announced plans earlier Thursday to top up its economic stimulus to 1 trillion yuan (around $150 billion).

This attempt, to try and restore an economy ravaged by drought and COVID-19 restrictions, has been well-received by the oil market, given China is the largest oil importer in the world.

This news has added positive momentum to a market that had already been boosted by the release of data by the Energy Information Administration showing that U.S. crude inventories fell by much more than expected last week.

The volume of crude and its products exported from the U.S. last week was the highest in a series going back to February 1991.

"EIA numbers released yesterday were fairly constructive," said analysts at ING, in a note. "U.S. commercial crude oil inventories fell by 3.28MMbbls over the last week. However, when taking into account releases from the strategic petroleum reserve, total U.S. crude oil inventories declined by a significant 11.37MMbbls."

Additionally, earlier the week, Saudi Energy Minister Prince Abdulaziz bin Salman flagged the possibility that the Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, could cut production, boosting the market.

He added that futures prices, which have fallen over 25% from their peaks earlier in the summer, are failing to reflect the tightness of the physical market.

Elsewhere, investors are also watching for progress on the revival of a nuclear deal with Iran, which could lead to the resumption of crude exports into the global market from the OPEC producer.

"The U.S. finally replied to the EU’s proposal for reviving the deal," ING added. "And while clearly, negotiations appear to be moving in the right direction, the US has said that "we’re not there yet" and that there are still "gaps" that remain."

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Russia suspends oil exports via southern leg of Druzhba pipeline – Reuters

Citing two sources familiar with the operation, Reuters reported on Tuesday that Russia suspended oil exports via the southern leg of the Druzhba pipeline from early August due to issues relating to transit fees.

"According to the sources, the payment from Russia's pipeline monopoly Transneft to Ukraine's pipeline operator Ukrtransnafta did not go through," Reuters explained.

Market reaction

Crude oil prices rose sharply with the initial reaction to this development. As of writing, the barrel of West Texas Intermediate was trading at $91.85, where it was up 1.55% on a daily basis.

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