Oil: Signs of unaddressed surplus - BBH

Research Team at BBH, suggests that with the latest decline, the September crude oil futures contract has retraced half of its advance from the $34.67 low in late-January to $52.73 high in June.

Key Quotes

“It is found near $43.70, within a nickel of the pre-weekend low.  The contract closed below its 200-day moving average (~$44.75) for the first time since May 9. Technical factors suggest the down move is not exhausted.  The 61.8% retracement is found near $41.60.  The continued increase in the US oil rig count coupled with crude inventories in excess of 100 mln barrels above the seasonal average warns of the unaddressed surplus as the US peak driving season is nearly over.”