Earlier today, stories crossed the tape about the U.S. Government planning to release up to 5 million barrels of crude oil from the Strategic Petroleum Reserve (SPR).
Although the timing of the release has not been decided, "its purpose is to check the operational capabilities of the system's infrastructure.
Even though the technicals suggested strongly that oil was going to reverse its recovery rally in a big way, from the look of the chart action recently, it would seem that someone knew about this well before the announcement.
Add the plus 6 million barrels of supply from this morning’s inventory report, and all of a sudden, it appears that NYMEX Crude Oil clearly has some excess supply challenges.
Then again, with The President of the United States of America (POTUS) and Congress poll number’s making new lows ahead of the mid-term elections, dare I suggest that any relief at the gas pump in the upcoming months orchestrated by release from the SPR could translate into votes?
In any case, let's keep an eye on the $97.50 area, which represents the equidistant swing-target zone off of the Mar 3 high at $105.22.
If oil holds there and turns up sharply, a correction likely will be complete ahead of another sharp rally to revisit $100 to $101.50.
If $97.50 fails to hold, then $95 is next on the way towards a revisit of the Jan low at $91.24.