Crude futures have exited the gates strongly this morning as the S&P futures rally and the Dollar depreciates against the Pound and the Euro. A depreciating Greenback makes the dollar-based economy more attractive to importers, boosting price. U. S. equities are reacting positively to an upbeat earnings report from Intel after the bell yesterday. Additionally, the empire manufacturing index exceeded analyst expectations, and has almost returned to growth for the first time since August 2008. Furthermore, U. S. CPI came in a basis point above analyst expectations and industrial production outperformed by two basis points.

The improvement in manufacturing and production implies a larger consumption of crude, giving a boost to the price of crude. Weekly crude inventories came in shallow of analyst expectations at -2.8 million barrels, just 100k more than last week’s -2.9 mill. Investors are sending crude lower despite all of the aforementioned positive catalysts. One development driving price lower could be Nigeria’s MEND agreeing to a 30 day cease-fire after the release of their leader, Henry Okah. Instability in Nigeria was sending crude hire earlier this month, so the futures could be struggling a little in the wake of the news.

Technically speaking, July 9th highs and our 1st tier uptrend line serve as the two largest barriers hindering accelerated immediate-term gains in crude. The futures have edged back below our 1st tier downtrend line, and $60/bbl continues to have a noticeable psychological influence on movement. At least crude has created some space between price and the two key cushions to the downside, May 18th lows and our 1st tier uptrend line. We expected consolidation between $58-$61/bbl, and it looks like the prediction is materializing. However, should U. S. equities continue their ascent and the dollar its depreciation, crude futures should follow suit due to their positive correlations.

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