United States Oil (USO) fell after industry data showed U.S. crude inventories unexpectedly rose last week

United States Oil (USO) fell after industry data showed U.S. crude inventories unexpectedly rose last week

United States Oil (USO) fell after industry data showed U.S. crude inventories unexpectedly rose last week

Oil prices fell on Wednesday after industry data showed U.S. crude inventories unexpectedly rose last week, erasing some gains from the last session that were stoked after Washington said it would delay tariffs on some Chinese goods.

The move by U.S. President Donald Trump sent commodities, stocks and other assets higher because of optimism the effects of the trade war, already being felt in economies across the world, will be blunted. Oil prices surged by as much as nearly 5 percent.

Brent crude was down 35 cents, or 0.6%, at $60.95 a barrel at 0116 GMT, after rising 4.7% on Tuesday, the biggest percentage gain since December.

U.S. oil was down 46 cents, or 0.8%, at $56.64 a barrel, having risen 4% the previous session, the most in just over a month.

Markets had been pummeled in recent weeks amid tough talk from Trump on trade and they remain on tenterhooks due to the unpredictably of the U.S. president.

Apart from signs that the U.S.-China trade tensions may be easing, analysts said prices were propped up by a belief that Saudi Arabia would stick with production cuts.

Saudi Arabia, the biggest producer among the Organization of the Petroleum Exporting Countries (OPEC), said last week it aims to keep its crude exports below 7 million barrels per day (bpd) in August and September to help siphon off global oil stocks.

OPEC and its allies, known as OPEC+, agreed to cut 1.2 million bpd of production from the beginning of this year.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 11.84.

The projected upper bound is: 12.67.

The projected lower bound is: 11.10.

The projected closing price is: 11.89.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 24 black candles.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with UNTD ST OIL FUND), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

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 88.3721. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 54.72. 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 42 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 53. This is not a topping or bottoming area. The last signal was a buy 2 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 buy 0 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed up 0.510 at 11.870. Volume was 74% above average (neutral) and Bollinger Bands were 25% narrower than normal.

Open     High      Low     Close     Volume___
11.330 11.930 11.310 11.870 47,875,448
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 11.36 11.62 11.86
Volatility: 55 43 42
Volume: 37,917,716 29,967,302 28,247,654

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 0.1% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 9 periods.

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