At the end of it all, hurricane Laura barely moved the dial but nudged oil prices higher enough to ensure the fourth weakly rise supported by a weaker US dollar and improving US economic data.
But with oil confined to pretty tight ranges after weeks of nothing but crickets, the storm price surge added some life to the markets. After a week-long round trip to $44 and above $46, prices end back where we started.
Crude oil price continues to be surprisingly range-bound in the context of all the various moving parts.
Markets shifted higher on Friday and are receiving support at the Monday open from all the inflation and weaker US dollar conversations post-Jackson Hole talk last week.
To a degree, oil prices are drawing comfort and support from broader markets. The reflation trade is a pretty strong signal for Oil markets. Still, the high-level question remains: where are we in the recovery?
I suspect traders remain snared between the often shifting short-term health risk triggered oscillations and more bullish longer-term dynamics.
As always, the focus remains on the near-term pace of the global economic recovery and the supply/demand dynamic.
Risks in the near-term remain skewed to the downside, given rising supply and demand uncertainty, which is seemingly keeping prices capped.
But with vaccine hopes, robust US economic data, and the “back to school” employment bounce, the medium and longer-term outlook points to a tightening market and higher oil prices.
Oil markets analysis and insights from Stephen Innes, Chief Global Market Strategist at AxiCorp