Article by ForexTime
With the spread of Brent to WTI moving closer to zero, WTI has re-established itself as a benchmark that represents global crude. The U.S. exported 401,000 barrels per day of crude oil in July 2014, the highest level of exports in 57 years and the second highest monthly export volume since 1920, when EIA’s published data starts. Recent crude oil exports have been sent to Canada, but condensate export has also been on the rise, moving to other destinations around the globe.
To export crude oil from the United States, a company must obtain a license from the U.S. Department of Commerce. Exports from Alaska’s Cook Inlet; exports to Canada for consumption; exports in connection with the refining or exchange of strategic petroleum reserve oil; exports that are consistent with international energy supply agreements; and exports of foreign-origin crude are generally approved.
The increase in exports shoes that demand is somewhat waning which is reflected in the prices of gasoline at the end of the driving season. Gasoline prices fell to the lowest levels since 2011. The U.S. average price for regular gasoline fell nine cents from the previous week to $3.12 per gallon as of October 20, 2014, 24 cents lower than the same time last year, and the lowest average price since January 31, 2011. The West Coast had the largest decrease, down 11 cents to $3.42 per gallon.
The technical picture for crude oil shows that a new weekly range was likely created. Prices moved through trend line and horizontal trend line support last week and were unable to recapture those levels during the most recent week. The new range is likely capped at $84 per barrel and floored at support near $77 per barrel. Momentum is negative with the MACD (moving average convergence divergence) index printing below the zero index level. The once caveat is that the RSI (relative strength index) is printing a reading of 24, with is below the oversold trigger level of 30 and could foreshadow a correction.
Article by ForexTime
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