Thursday’s Technical Analysis: WTI Crude Oil (USO)

Posted by: : Paul EbelingPosted on: July 16, 2015 Thursday's Technical Analysis: WTI Crude Oil (USO)

Thursday’s Technical Analysis: WTI Crude Oil (USO)

WTI Crude Oil closed higher Wednesday

The high range close set the stage for a steady to lower open Thursday on the NYMEX.

Stochastics and the RSI are oversold but Neutral to Bearish indicating that sideways to lower prices are possible near term.

If WTI Crude Oil resumes the decliner off of the May highs, The March low crossing is the next Southside target.

Closes above the 20-Day MA crossing are needed to confirm that a low is in.


International Crude Oil and financial sanctions against Iran will be lifted.

Shayne and I expect it will take a year + before Iran can increase production significantly. This is probably a reason for the Crude Oil price movement.

Iran owns about 10% of global Crude Oil reserves and 18% of the Nat Gas reserves. Multinational Oil companies including Royal Dutch Shell (NYSE:RDS-A), Total of France (NYSE:TAT), and Eni (NYSE:ENI) of Italy have also approached the country for investment opportunities in recent weeks.

Before lifting of sanctions, Iran has a production capacity of 3.5-M BPD around 4% of global output. Its export markets include: China, India, Japan, South Korea and Turkey.

On Crude Oil inventory, the industry-sponsored API estimated Crude Oil inventory fell -7.3 M bbl in the week ended 10 July.

For the DOE/EIA report due Wednesday, the market expects Crude stockpile to have dropped -1.2-M bbl.

For fuels, gasoline stock probably fell -2.04-M bbl, and distillate rose +1.3-M bbl.

Crude Oil’s collapse is largely attributed to lower global demand, which was accompanied by more production from the Organization of the Petroleum Exporting Countries (OPEC). OPEC members, seeking to defend their market share of a highly oversupplied Crude Oil market, have engaged in a ‘price ware.”

West Texas Intermediate (WTI), also known as WTI Crude Oil or Texas light sweet, is a grade of Crude Oil used as a benchmark in Oil pricing.

This grade is described as light because of its relatively low density, and sweet because of its low sulfur content.

Crude Oil is the underlying commodity of Chicago Mercantile Exchange’s COMEX Oil futures contracts.

The price of Crude Oil is often referenced in news reports on Oil prices, alongside the price of Brent Crude (OIL) from the North Sea.

Other important Oil markers include the Dubai Crude, Oman Crude, Urals oil and the OPEC Reference Basket.

WTI Crude Oil is lighter and sweeter than Brent Crude Oil, and considerably lighter and sweeter than Dubai or Oman.

Stay tuned…


Paul Ebeling



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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.

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