United States Oil (USO) investors focused on worries about slowing global growth and uncertainty surrounded Russia’s decision

United States Oil (USO) investors focused on worries about slowing global growth and uncertainty surrounded Russia’s decision

United States Oil (USO) investors focused on worries about slowing global growth and uncertainty surrounded Russia’s decision

Oil futures finished lower on Monday as investors focused on worries about slowing global growth and uncertainty surrounded Russia’s decision on whether to extend production curbs beyond their expiration this month.

Prices fell closer to the session’s lows just ahead of the day’s settlement, as some private forecasters revealed expectations that the U.S. government on Wednesday will report “another big build” at the U.S. oil trading hub in Cushing, Oklahoma, said Phil Flynn, senior market analyst at Price Futures Group.

Oil then finished solidly lower, after a more than half-hour settlement delay. A CME spokesman confirmed the delay to WTI settlement data, but had no further information at the time.

The U.S. decision to shelve tariffs on Mexican imports had provided some underlying support to oil prices in early dealings.

“We have a trade deal with Mexico, again, after Mexico promised the Trump administration that it would expand border programs to slow migration into the U.S.,” said Flynn. “Now if we get a deal with China it will be risk-on nirvana.”

Uncertainty remains around prospects for the Organization of the Petroleum Exporting Countries, or OPEC, and its allies, particularly Russia, extending an agreement to curb output that took effect at the beginning of the year. Russian Energy Minister Alexander Novak on Monday said he couldn’t rule out a scenario in which oil falls to $30 a barrel if a global agreement wasn’t extended, according to Reuters.

OPEC members pumped 30.09 million barrels a day in May, the lowest since February 2015, before Gabon, Equatorial Guinea and Congo joined the group, tough Qatar was still a member at the time, according to an S&P Global Platts survey. Saudi production fell to 9.7 million barrels a day—the lowest since January 2015 and Iraqi output jumped to an all-time high of 4.82 million barrels a day, the survey showed.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 12.09.

The projected upper bound is: 11.79.

The projected lower bound is: 10.38.

The projected closing price is: 11.09.

Candlesticks

A black body occurred (because prices closed lower 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 24 white candles and 25 black candles for a net of 1 black candles.

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 69.2055. This is not an overbought or oversold reading. The last signal was a buy 2 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 33.07. 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 2 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 -56. This is not a topping or bottoming area. The last signal was a buy 1 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 11 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed down -0.120 at 11.110. Volume was 3% above average (neutral) and Bollinger Bands were 158% wider than normal.

Open High Low Close Volume___
11.230 11.350 11.044 11.110 23,493,004

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 11.36 12.73 12.58
Volatility: 49 36 39
Volume: 30,780,846 24,539,294 25,805,260

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 11.7% below 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 25 periods.

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