United States Oil (USO) Decline in Iranian exports
Crude oil prices in the U.S. and around the world continued their upward swing this week. U.S. oil prices on the New York Mercantile Exchange broke through the $75 per barrel mark and the $85 mark for Brent traded in London.
News of sharp declines of oil exports from Iran have made many traders fearful of a supply shortage. Iranian exports hit a low level with a decline of about 250,000 barrels per day from August and about 1 million barrels per day from April. Current exports from Iran are estimated at 1.7 million barrels per day.
The price differential between Brent and NYMEX has grown to $10, and as much as $15 per barrel for oil produced in the Permian Basin of West Texas because of pipeline bottlenecks creating an oversupply.
U.S. crude oil exports have increased by 787,000 barrels per day, or more than 80 percent, from the first half of 2017 to the first half of 2018 and set a new monthly record of 2.2 million barrels per day in June.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 14.72.
The projected upper bound is: 16.38.
The projected lower bound is: 15.15.
The projected closing price is: 15.77.
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 5 black candles for a net of 1 black candles. During the past 50 bars, there have been 19 white candles and 27 black candles for a net of 8 black 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 73.6319. This is not an overbought or oversold reading. The last signal was a sell 0 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 64.42. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 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 95. This is not a topping or bottoming area. The last signal was a sell 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 buy 12 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed down -0.340 at 15.740. Volume was 32% above average (neutral) and Bollinger Bands were 38% wider than normal.
Open High Low Close Volume___
16.030 16.030 15.610 15.740 26,401,654
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 15.50 14.55 13.58
Volatility: 27 27 29
Volume: 20,757,788 17,739,380 19,627,598
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 15.9% above its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect moderate flows of volume into USO (mildly bullish). Our trend forecasting oscillators are currently bullish on USO and have had this outlook for the last 27 periods.