WTI crude oil futures are testing the upper boundary of a multi-month descending channel. The Relative Strength Index (RSI) is currently near 58, while TTM bars are showing slight expansion.
The US Strategic Petroleum Reserve (SPR) has hit a 43-year low, with current stocks sitting at significantly lower levels than prior cycle lows.
Current level of the US Strategic Petroleum Reserve (SPR)
Retail gasoline prices have remained steady, a trend reflecting crude oil consolidation between $70 and $78 during the summer and the reduction of the SPR. Meanwhile, US oil output and exports are running strong.
Market Outlook and Policy Implications
Some analysts suggest that using the SPR as an artificial price damper is no longer a viable policy tool without risking core energy security. It is argued that unless a sudden macroeconomic demand destruction event occurs, the path of least resistance for energy prices is likely upward.
