United States Oil (USO) climbs as China reported its lowest daily number of new coronavirus cases

United States Oil (USO) climbs as China reported its lowest daily number of new coronavirus cases

United States Oil (USO) climbs as China reported its lowest daily number of new coronavirus cases

Oil prices climbed on Wednesday as China reported its lowest daily number of new coronavirus cases since late January, stoking investor hopes that fuel demand in the world’s second-largest oil consumer may begin to recover from the epidemic.

Brent crude was up 98 cents, or 1.8%, at $54.99 per barrel at 0335 GMT. U.S. West Texas Intermediate (WTI) rose 81 cents, or 1.4%, to $50.65 a barrel.

According to data through Tuesday, the growth rate of new coronavirus cases in China has slowed to the lowest since Jan. 30. Still, international experts remained cautious over forecasting when the outbreak might reach a peak.

Travel restrictions to and from China and quarantines have cut fuel usage. The two biggest Chinese refiners have said they will reduce their processing by about 940,000 barrels per day (bpd) as a result of the consumption drop, or about 7% of their 2019 processing runs.

On the supply side, the Organization of Petroleum Exporting Countries (OPEC) and its allies including Russia, known as OPEC+, recommended a further cut of 600,000 bpd last week to stem the oil price fall.

However, Russia has been hesitant to commit to the additional cut, while Saudi Arabia wanted global major oil producers to agree a quick oil supply cut.

U.S. crude inventories rose by 6 million barrels in the week to Feb. 7 to 438.9 million barrels, beating analysts’ expectations for an increase of 3 million barrels, data from industry group the American Petroleum Institute showed.

Technical Indicators

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 11.54.

The projected upper bound is: 11.02.

The projected lower bound is: 9.91.

The projected closing price is: 10.47.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 white 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 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 22.5165. 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 28.15. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 24 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 -78. This is not a topping or bottoming area. The last signal was a buy 4 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 23 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed up 0.080 at 10.500. Volume was 16% above average (neutral) and Bollinger Bands were 97% wider than normal.

Open     High      Low     Close     Volume___
10.630 10.640 10.450 10.500 24,936,160
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 10.69 12.03 11.86
Volatility: 29 30 39
Volume: 30,085,796 20,617,116 25,949,182

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 is currently 11.5% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of USO (mildly bearish). Our trend forecasting oscillators are currently bearish on USO and have had this outlook for the last 19 periods. Our momentum oscillator is currently indicating that USO is currently in an oversold condition.

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