United States Oil (USO) at two-week lows
Oil futures marked their lowest finish in roughly two weeks on Wednesday, as U.S. government data revealed that domestic crude supplies fell for a fifth straight week, but the stocks were down by less than the market expected and product inventories climbed.
August West Texas Intermediate crude CLQ19, +0.12% shed 84 cents, or 1.5%, to settle at $56.78 a barrel on the New York Mercantile Exchange, after a 3.3% tumble on Tuesday. Prices settled at their lowest since July 3.
International benchmark September Brent BRNU19, +0.35% had spent part of the session moving higher, before following WTI lower. It fell 69 cents, or 1.1%, to end at $63.66 a barrel on ICE Futures Europe, the lowest since July 4.
Potential progress toward negotiations between the U.S. and Iran over Tehran’s missile program also put pressure on oil prices Wednesday.
Tensions between Tehran and Washington have escalated since last year when the Trump administration withdrew from a nuclear agreement with the Middle Eastern country and tightened sanctions against the country last May.
Meanwhile, the Energy Information Administration early Wednesday reported that U.S. crude supplies fell for a fifth consecutive week, but by less than the market expected—and petroleum products posted sizable gains.
Crude stockpiles were down 3.1 million barrels for the week ended July 12. They were forecast to fall by 4.2 million barrels, according to analysts polled by S&P Global Platts. The American Petroleum Institute on Tuesday reported a decline of 1.4 million barrels, according to sources.
A hurricane-impacted report shows a drop in production and imports offsetting lower refining activity to yield a draw to crude stocks,” said Matt Smith, director of commodity research at ClipperData. “Next week’s report will likely be even more mottled by the impact of Hurricane Barry.” The Bureau of Safety and Environmental Enforcement didn’t yet have an update on Gulf of Mexico production Wednesday, citing an internet outage, but oil output had improved from the weekend, with 58% of Gulf oil output down as of Tuesday.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 12.53.
The projected lower bound is: 10.92.
The projected closing price is: 11.72.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 22 white candles and 26 black candles for a net of 4 black candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 25.6040. This is not an overbought or oversold reading. The last signal was a sell 2 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 45.21. 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 23 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 -84. This is not a topping or bottoming area. The last signal was a sell 2 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 0 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed down -0.320 at 11.750. Volume was 21% above average (neutral) and Bollinger Bands were 27% narrower than normal.
Open High Low Close Volume___
12.110 12.110 11.740 11.750 30,196,988
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 12.14 12.00 12.21
Volatility: 35 44 41
Volume: 23,641,018 28,117,490 27,567,508
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 3.7% below its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of USO at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on USO and have had this outlook for the last 15 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.