Oil reverses to finish $2 lower, ending winning streak

Oil came into the day on a three-day winning streak and looked to be extending that to four as gains stretched to $114.01 at the highs.

But a sharp turnaround started four hours ago and it finished just below $110.

One of the reasons was a comment from a US OPEC envoy who said he hopes the cartel will move to ‘step 2’ of efforts to increase supply. The sequencing reference in his comments suggests that the US pitched a plan to the Saudis, which obviously got some traction as they surprised the market last month by upping production.

Tomorrow is the OPEC+ meeting so we won’t have to wait long.

On the technical side, the top came in between the 50-61.8% retracement levels of the June swoon. That’s not a great sign for the bulls, nor is the (borderline) outside day today.