United States Oil (USO) closed higher amid falling U.S. oil inventories

United States Oil (USO) closed higher amid falling U.S. oil inventories

United States Oil (USO) closed higher amid falling U.S. oil inventories

Crude oil prices closed higher amid falling U.S. oil inventories and a Saudi pledge to extend recent production cuts, with the latest Fed rate hike having little impact Wednesday.

U.S. Oil Inventories And Production Data

The Energy Information Administration’s weekly data report had little effect on oil prices earlier in the trading day. The EIA reported a 0.5 million barrel drop in U.S. crude oil inventories. Gasoline supplies rose by 1.8 million barrels.

Analysts polled by S&P Global Platts forecast a 3 million barrel drop in crude oil inventories and an increase of 2.6 million barrels of gasoline.

Diverting from the EIA again, the American Petroleum Institute reported a 3.5 million barrel increase in crude supplies late Tuesday. The industry group saw a  1.8 million barrel increase in gasoline stockpiles.

Saudi Energy Minister Khalid Al-Falih told reporters that he’s sure that the OPEC meeting crude oil production cut will be extended in April.

The expiring January crude oil prices contract closed up 2.1% to $47.20 a barrel. February crude oil prices, now the near-month contract, advanced 3.4% to $48.17.

Exxon Mobil (XOM) shares reversed down to close off 1.7% at 70.78 on the stock market today. Fellow Dow Jones energy giant Chevron (CVX) fell 1.7%. EOG Resources (EOG) sank 1.1%.

Overall, the bias in prices is: Downwards

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 10.82.

The projected lower bound is: 9.00.

The projected closing price is: 9.91.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 16 white candles and 32 black candles for a net of 16 black candles.

A bullish harami occurred (where the current small white body is contained within an unusually large black body). During a downtrend (which appears to be the case with UNTD ST OIL FUND) this pattern implies an end to the decline as the bears appear to have exhausted themselves.

During an uptrend the bullish harami pattern is bearish as the bears appear to be gaining strength as the bulls weaken.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 9.8985. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 13 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 32.69. This is not a topping or bottoming area. However, the RSI just crossed above 30 from a bottoming formation. This is a bullish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 0 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 -187.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 13 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 0 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed up 0.230 at 10.020. Volume was 42% above average (neutral) and Bollinger Bands were 22% narrower than normal.

Open High Low Close Volume___
9.970 10.200 9.920 10.020 38,468,528

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 10.69 12.60 13.64
Volatility: 59 49 37
Volume: 39,157,824 34,296,096 23,412,200

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 26.6% below its 200-period moving average and is in an downward 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 bearish on USO and have had this outlook for the last 44 periods.

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