Oil: Volatility continues amidst weekend rally in prices - BBH

The continued dramatic slide in US crude oil inventories, the announcement of cuts in capex at several large oil companies, and new export restraint announced by Saudi Arabia (August) and UAE (September) spurred a rally in oil prices that carried the September light sweet contract to almost $50 a barrel ahead of the weekend, notes the analysis team at BBH. 

Key Quotes

“It is the highest the contract has been since the end of May.   It surged through the trendline drawn off the April and May highs ($48.70 on July 31).  It closed higher every day last week, and the nearly 8.5% gain over the stretch is the most since the end of August 2015. The gains ensure that the four-month declining streak is over.  July will be the second month this year that oil prices rose.  However, the technical indicators are stretched, and the Slow Stochastics are flat lining.  Initial support is seen near $48, while the next target is around $52.00-$52.50.”