Crude futures tapped a record $80 a bl. today. Traders
blew off reports that OPEC intended to boost production
by 500K bd., preferring to focus on reports of tighter
crude inventories in the US and the rapid development of
a tropical storm just south of Galveston, TX and west of
major offshore producing fields. Storm warnings went up
from Houston east to Lake Charles, LA.
This is a strong contra-seasonal move for the oil price.
It also brings oil into clear overbought territory, as
it has a high weekly RSI and is now trading well above
its 40 wk. moving average.
Interesting moment. Traders are pushing oil higher as we
near the eve of the FOMC's forthcoming meeting on interest
rate policy set for the 18th. The Street and many leading
economists are busy steamrolling the Fed into cutting rates,
and now the price of crude remains on a role and hits new
highs.
Let's see how the traders handle a strongly gathering
overbought on crude with this interesting mix of variables.
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