United States Oil (USO) finishes lower as U.S. supplies rise a second straight week

United States Oil (USO) finishes lower as U.S. supplies rise a second straight week

United States Oil (USO) finishes lower as U.S. supplies rise a second straight week

Oil futures finished with a loss on Wednesday as U.S. government data revealed a second weekly climb in domestic crude inventories.

Also weighing on prices were news reports saying Saudi Arabia had restored most of crude production capacity, recovering from attacks on its facilities earlier this month.

U.S. supplies rose more than expected last week, though was “largely offset by the less-bearish to mildly bullish inventory statistics for the refined products,” said Tyler Richey, co-editor of Sevens Report Research.

Domestic crude-oil production edged higher by 100,000 barrels a day to “revisit the all-time record high” of 12.5 million barrels a day, which is slightly bearish, he said. However, “in the face of the uncertain outlook for Saudi Arabian production right now, the market is capable of absorbing elevated U.S. production for the time being.”

West Texas Intermediate crude for November delivery CLX19, -0.02%  fell 80 cents, or 1.4%, to settle at $56.49 a barrel on the New York Mercantile Exchange. The was the lowest front-month contract finish since Sept. 13, though prices finished off the session low of $55.55. November Brent crude BRNX19, -0.03%, the global benchmark, lost 71 cents, or 1.1%, to $62.39 a barrel on ICE Futures Europe.

Meanwhile, U.S. House Speaker Nancy Pelosi on Tuesday announced an impeachment inquiry into President Donald Trump after reports that Trump pressed Ukraine’s President Volodymyr Zelensky to investigate former Vice President Joe Biden and his son. A summary of a July telephone call released by the White House on Wednesday provided some confirmation.

“The general risk off sentiment and money flows related to the impeachment inquiry is weighing slightly on energy, but the headlines that Iran may be willing to come back to the negotiating table regarding their nuclear programs and U.S. sanctions” is likely putting more pressure on oil, said Richey. Reuters reported Tuesday that Iranian President Hassan Rouhani said he was open to discuss small changes to the 2015 nuclear deal if the U.S. lifted sanctions.

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: 12.74.

The projected lower bound is: 10.85.

The projected closing price is: 11.79.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 25 white candles and 25 black 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.

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 21.0405. This is not an overbought or oversold reading. The last signal was a buy 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 49.23. 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 72 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 -62. This is not a topping or bottoming area. The last signal was a sell 5 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 down -0.100 at 11.800. Volume was 29% below average (neutral) and Bollinger Bands were 14% narrower than normal.

Open     High      Low     Close     Volume___
11.660 11.820 11.600 11.800 21,647,644
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 12.04 11.65 11.78
Volatility: 77 51 43
Volume: 39,211,496 31,531,630 27,441,364

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 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 0.2% above its 200-period moving average and is in an upward 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 bullish on USO and have had this outlook for the last 15 periods.

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