Oil & Gas Prices - July 23

[dan_s]

Note from HFI Research: WTI Oil Price

The oil market is "coiling", technically speaking.

For those of you unfamiliar with technical analysis jargon, the basic premise is the triangle formation you can see in the chart above. The trading pattern gets narrower and narrower until a more decisive break occurs.

In this case, we think the technical break happens to the upside. I think we could see WTI reach ~$95 this year if things go according to plan. On the lower end, we see WTI reaching ~$90/bbl.

For the week ending July 19, we have a U.S. crude oil draw of 7.06 million bbls.

This will be another bullish crude draw report relative to the 5-year average (-3.031 million bbls).

An important note to all readers, because of the bullish surprise from EIA last week, we can't say for certain whether the bullishness was the result of a correction from EIA's previous errors or a new error they have made.

For example, if they incorrectly counted imports/exports last week, then there's the possibility that this week's report crude draw could be smaller than our estimate.