Barclays 20/07
Crude (September)
Short Term: Very strong seasonals – While price action finished modestly lower Friday, gains remain corrective. As we
showed in a separate report released today, the September contract has a very strong season bias to rally when it
serves as the front month, having finished higher 70% of the time since 1987. However, this bias is even more
pronounced in the first two weeks of the front-month period (which begins Monday), with September WTI having
rallied in 13 of the past 14 years (the orange bars shown above), with an average rise of 3.5%. From Friday’s close of
75.74, this suggests an upside to 78.39. However, given the strength of the ongoing uptrend, we continue to look for
WTI crude to test and potentially break its all-time highs (80.64, basis September) in the weeks/months ahead. Nearterm
support is seen at 75.75 (month-long channel) and then the July 17, 73.66 low.
Medium Term: Uptrend – The WTI weekly closing break through 70.00 indicates a resumption of the year-to-date
uptrend, setting up an eventual test of 80.00.