Crude turns down at resistance
Crude oil started the week on the backfoot. It made gains throughout the first half of last week, but was unable to break above resistance, and pulled back from its best levels on Thursday and Friday. For front-month US Light, that resistance topped out around $72.50 on a closing basis. This level acted as a barrier in both September and October, and now November as well. Trump’s win in the presidential election seems likely to bring tax cuts and deregulation which should boost business, and possibly a small uplift in domestic demand. At the same time, Trump has made it clear he wishes to encourage US energy production, particularly oil and gas, and this should keep prices under downside pressure. Meanwhile, numbers released last week backed up analysis showing a slowdown in future demand growth. China, the world’s largest oil importer, recorded a sixth successive month-on-month fall in October. At some point the buyers will come back in. But for now it looks as if oil prices have further to fall, which should be good news for most of the world, if not Europe in the UK where tax plays such a significant role in pricing.
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