United States Oil (USO), Canadian oil company bankruptcies surge 50 per cent in 2019

United States Oil (USO), Canadian oil company bankruptcies surge 50 per cent in 2019

United States Oil (USO), Canadian oil company bankruptcies surge 50 per cent in 2019

The number of oil and gas company bankruptcies in the United States and Canada rose 50% in 2019 over the previous year, and is likely to increase as a slide in energy prices continues to shake producers Dallas law firm Haynes and Boone said in a report released on Wednesday.

U.S. and Canadian oil and natural gas exploration and production company bankruptcies totaled 42 in 2019, up from 28 in 2018, the law firm said.

The increase seems likely to continue, said Buddy Clark, partner at Haynes and Boone.

“I think the trend line should be moving up in the first half of 2020,” Clark said.

A total of 208 oil and gas production companies have filed for bankruptcy between 2015 and 2019, according to the report.

“This increase in year-over-year filings indicates that the reverberations of the 2015 oil price crash will continue to be felt in the industry through at least the first half of 2020,” Haynes and Boone said in the report.

The impact of new U.S. oil and natural gas production is being felt globally, Clark said.

“That’s why you can bomb a major oil facility in Saudi Arabia or kill an Iranian general or shut in all Libyan oil production and prices don’t move,” he said.

Thanks to a shale boom, the United States has become the world’s top oil producer, adding to a global surplus leading the market to shrug off September’s attacks on Saudi Arabia’s oil facilities, January’s U.S. air strike that killed a top Iranian commander, and this week’s disruptions to Libya’s crude output.

Oilfield service companies were again hit hard with the number of bankruptcies nearly doubling from 12 in 2018 to 21 in 2019, the largest being the $7.4-billion filing by Weatherford International in July.

Midstream companies that provide storage and pipelines to producers fared better with only two bankruptcies in 2019 out of a total of 28 since the beginning of 2015.

Technical Indicators

Overall, the bias in prices is: Downwards.

The projected upper bound is: 12.44.

The projected lower bound is: 11.36.

The projected closing price is: 11.90.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 5 black candles for a net of 1 black candles. During the past 50 bars, there have been 29 white candles and 20 black candles for a net of 9 white candles.

A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 4 falling windows in the last 50 candles–this makes the current falling window even more bearish.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 43.6123. This is not an overbought or oversold reading. The last signal was a buy 3 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 34.52. 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 sell 10 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 -114.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 3 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 9 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed down -0.340 at 11.900. Volume was 14% above average (neutral) and Bollinger Bands were 17% wider than normal.

Open     High      Low     Close     Volume___
12.030 12.040 11.875 11.900 25,571,668
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 12.30 12.34 12.04
Volatility: 27 28 39
Volume: 22,840,650 18,651,380 25,302,520

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.

Summary

UNTD ST OIL FUND gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
UNTD ST OIL FUND is currently 1.1% below its 200-period moving average and is in an downward trend. Volatility is 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 5 periods.

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