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

Posted by: : Paul EbelingPosted on: March 12, 2015 Thursday's Technical Analysis: WTI Crude Oil (USO)

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

WTI Crude Oil (USO) closed lower Wednesday.

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

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

If USO extends this month’s decliner, the 62% Fibo retracement mark of the January March rally crossing is the next Southside target.

Closes below the 20-Day MA crossing will confirm that a short term top is in.

The EIA have revised up its US Crude Oil production outlook for this year, but lowered it for Y 2016. The agency estimated that Oil production would increase to 9.35-M BPD this year, compared with the 9.3-M BPD.

In Y 2016, Crude Oil production is expected to reach 9.49-M BPD down from previous estimate of 9.52-M BPD.

On another note, the industry-sponsored API surprisingly estimated a decline in Crude inventory for the past week. Crude inventory fell -0.4-M bbl in the week ended 6 March. For fuels, gasoline and distillate inventories both added +1.7-M bbl.

The official DOE/EIA report probably shows Crude stock +4.2-M bbl.

US Crude Oil (USO) imports have been declining on the back of the US shale Oil boom that has brought the nation near energy independence.

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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.

Trade FX, Equities and Options with the World's Leading Platform , call our trade desk 631 482 0376, or contact us to get started.

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