United States Oil (USO) extending losses after a surge in U.S. inventories surprised investors
Oil prices fell for a fourth day on Wednesday, extending losses after a surge in U.S. inventories surprised investors, overshadowing an interest rate cut by the Federal Reserve.
Brent crude futures were down 6 cents at $60.55 a barrel by 0033 GMT, having fallen by 1.6% on Wednesday.
U.S. West Texas Intermediate (WTI) crude futures were down by 16 cents, 0.3%, at $54.90 a barrel, after declining 0.9%.
The Federal Reserve on Wednesday cut interest rates for a third time this year and signaled it plans no further cuts unless the economy takes a turn for the worse.
While a rate cut can often be bullish for oil prices because a stronger economy typically implies higher demand for crude, investors focused on soaring U.S. crude oil stockpiles amid higher imports and a release from national reserves.
“Oversupply concerns are dampening the optimistic outlook to the economy that the Fed painted,” said Edward Moya, senior market analyst at OANDA.
Crude inventories rose 5.7 million barrels in the week to Oct. 25, the U.S. Energy Information Administration said on Wednesday, compared with analysts’ expectations for a 494,000-barrel build.
On Tuesday, the American Petroleum Institute, an industry group, had reported a 708,000-barrel decline in inventories, raising hopes that official figures would also show a drop.
Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures rose for a fourth straight week, gaining 1.6 million barrels last week, the EIA said.
Still, gasoline and distillate inventories extended their declines even as refiners ramped up production, it said.
Gasoline stocks fell by 3 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.2 million-barrel drop. The fifth weekly drop brought stocks down to 220.1 million barrels, their lowest since Nov. 2017.
Distillate stockpiles, which include diesel and heating oil, declined for a sixth week in a row, falling 1 million barrels last week, versus expectations for a 2.4 million-barrel drop, the EIA data showed.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 12.30.
The projected lower bound is: 10.63.
The projected closing price is: 11.47.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 25 white candles and 25 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 46.8926. This is not an overbought or oversold reading. The last signal was a sell 1 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 50.32. 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 97 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 25. This is not a topping or bottoming area. The last signal was a sell 1 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 -0.110 at 11.470. Volume was 16% below average (neutral) and Bollinger Bands were 26% narrower than normal.
Open High Low Close Volume___
11.570 11.570 11.360 11.470 23,960,828
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 11.50 11.54 11.91
Volatility: 23 45 38
Volume: 19,666,934 27,559,366 26,051,414
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 low 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 1 periods.