United States Oil (USO) fell as a lack of details about the first phase of a trade deal between the United States and China undercut optimism
Oil prices fell sharply on Monday as a lack of details about the first phase of a trade deal between the United States and China undercut optimism over a trade relations thaw that had helped lift crude markets at the end of last week.
Brent crude dropped $1.27, or 2.1%, to $59.24 a barrel, while U.S. West Texas Intermediate (WTI) crude lost $1.11, or 2%, to settle at $53.59 a barrel.
“The excitement about the U.S.-China trade deal went away,” said Phil Flynn, an analyst at Price Futures Group in Chicago.
Late on Friday, the United States and China outlined the first stage of a trade deal and suspended this week’s scheduled U.S. tariff hikes. Brent and WTI rose more than 3% last week, their first weekly increase in three, on the signs of progress toward a trade deal that would boost crude oil demand.
But existing tariffs remain in place and officials on both sides said much more work was needed before an accord could be agreed.
Russian Energy Minister Alexander Novak said there were no talks underway to change the OPEC+ deal.
Kuwait’s oil minister said it was too early to discuss a possible buildup in oil inventories in 2020. Khaled al-Fadhel said a price range of $50-70 per barrel would be acceptable.
The compliance of OPEC+ producers with the supply-reduction agreement was seen at above 200% in September, sources familiar with the matter said on Monday.
China showed strong demand for oil, with its September imports rising 10.8% from a year earlier as refiners ramped up output amid stable profit margins and solid demand for fuel.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 11.49.
The projected upper bound is: 12.07.
The projected lower bound is: 10.28.
The projected closing price is: 11.17.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.
A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 6 falling windows in the last 50 candles–this makes the current falling window even more bearish.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
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.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 76.4280. This is not an overbought or oversold reading. The last signal was a buy 6 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 44.71. 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 85 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 -27. This is not a topping or bottoming area. The last signal was a buy 5 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 0 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed down -0.240 at 11.180. Volume was 20% below average (neutral) and Bollinger Bands were 16% wider than normal.
Open High Low Close Volume___
11.160 11.215 11.030 11.180 23,795,792
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 11.09 11.53 11.84
Volatility: 28 48 39
Volume: 26,305,404 30,729,554 26,695,060
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 gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
UNTD ST OIL FUND is currently 5.6% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 9 periods.