WTI/USD – US Crude Under Pressure, US Election Looms

US crude is almost unchanged in the Monday session. In North American trade, WTI/USD is trading at $44.43 per barrel. Brent futures are trading at $45.63, as the Brent premium stands at $1.20. On the release front, there are no major US events on the schedule. On Tuesday, the US will release JOLT Job Openings and the markets will be focusing on the US presidential election.

US employment numbers for October were released on Friday and the numbers were encouraging. Nonfarm payrolls improved to 161 thousand, although this fell short of the forecast of 171 thousand. Average Hourly Earnings rose 0.4%, edging above the estimate of 0.3%. The unemployment rate remained unchanged at 4.9%. FOMC member Stanley Fischer said on Friday that the labor market’s improvement has been robust and is close to full employment. Despite the solid employment numbers, US crude continued to lose ground on Friday. The commodity suffered its worst week since July, plunging 8.8 percent, as doubts continue over OPEC’s ability to cut production as well as a huge surplus in US crude stockpiles.

The US goes to the polls on Tuesday, and this event will likely dominate the markets throughout the week. Although polls continue to point to a tight race, Clinton appears to have the upper hand as she has an easier path to garnering the 270 electoral votes needed to claim victory. The most recent polls indicate that voters favor Clinton over Donald Trump by a margin of three to five percent. The Clinton campaign received a boost as the FBI announced that it had no reason to change its conclusion that Clinton was not guilty of criminal wrongdoing in her use of private emails while she was secretary of state. The US dollar posted gains following the FBI announcement, and the greenback could continue to move higher if Clinton wins the election. There are different market scenarios depending on the actual outcome of the election, with the worst case scenario being a too-close-to-call result. If either candidate fails to deliver a decisive victory, the leadership vacuum and uncertainty surrounding the result could trigger higher volatility in the markets. If the election does spark market volatility, the Federal Reserve could hold off from raising interest rates at its next policy meeting in December.

WTI/USD Fundamentals

  • 10:00 US Labor Market Conditions Index. Actual 0.7
  • 15:00 US Consumer Credit. Estimate 17.6B
  • Tentative – US Loan Officer Survey

Upcoming Key Events

Tuesday (November 8)

  • 10:00 US JOLTS Jobs Openings. Estimate 5.67M
  • All Day – US Presidential Election

*All release times are EDT

*Key events are in bold

WTI/USD for Monday, November 7, 2016

WTI/USD November 7 at 11:45 EDT

Open: 44.51 High: 45.98 Low: 44.1 Close: 44.43

WTI USD Technical

S3 S2 S1 R1 R2 R3
28.71 33.22 40.57 46.54 52.22 58.32

WTI/USD has been flat over the course of the Monday session

  • 40.57 is providing support
  • 46.54 is a weak resistance line

Further levels in both directions:

  • Below: 40.57, 33.22 and 28.71
  • Above: 46.54, 52.22 and 58.32

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.