United States Oil (USO) Saudi Arabia signals OPEC deal extension
Oil prices rose on Friday, climbing further from five-month lows hit this week, after Saudi Arabia said OPEC was close to agreeing to extend an output production cut beyond June.
Brent crude futures rose 2.7% to $63.33 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 2.7% to $53.99 a barrel.
Both benchmarks were on track for a third weekly decline. On Wednesday they hit their lowest since January.
Saudi Energy Minister Khalid al-Falih told a conference in Russia that the Organization of the Petroleum Exporting Countries (OPEC) and its allies should extend oil production cuts.
He said that while OPEC was close to agreement, more talks were needed with non-OPEC countries that were part of the deal to reduce output by 1.2 million barrels per day (bpd), which runs out at the end of this month.
Supply has also been limited by U.S. sanctions on oil exports from Venezuela and Iran. On Thursday, Washington tightened pressure on Venezuela’s state-owned oil company by making clear that exports of diluents by international shippers could be subject to sanctions.
Demand sentiment remains weak as investors worry about a stalling global economy and an intensifying trade war between the United States and China.
The United States has also threatened tariffs on goods from major trading partner Mexico. U.S. President Donald Trump vowed that tariffs of 5% will be imposed on all Mexican exports to the United States on Monday if Mexico does not step up efforts to stem an increase in migrants heading for the U.S. border.
U.S. and Mexican negotiators resumed migration talks on Friday. Marc Short, chief of staff to U.S. Vice President Mike Pence, said the administration planned to move forward with a legal notification of its planned 5% tariff.
But some market participants were skeptical the tariffs would go into effect on Monday.
“We believe that Trump will delay any tariffs as he will attempt to preclude another dive in the stock market,” Jim Ritterbusch of Ritterbusch and Associates said in a note.
Because of weak economic data and the widening trade conflict, Commerzbank revised their third-quarter forecast for Brent down to $66 from $73 a barrel.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 12.13.
The projected upper bound is: 11.91.
The projected lower bound is: 10.51.
The projected closing price is: 11.21.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 41.3456. This is not an overbought or oversold reading. The last signal was a buy 1 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 34.46. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 1 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -67. This is not a topping or bottoming area. The last signal was a buy 0 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 10 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed up 0.170 at 11.230. Volume was 15% above average (neutral) and Bollinger Bands were 156% wider than normal.
Open High Low Close Volume___
10.970 11.300 10.950 11.230 26,155,166
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 11.48 12.76 12.59
Volatility: 51 36 39
Volume: 30,584,252 24,483,456 25,741,412
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
UNTD ST OIL FUND is currently 10.8% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of USO at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on USO and have had this outlook for the last 24 periods.