United States Oil (USO) lower as optimism over an end to the US-China trade war faded
Oil futures fell on Friday as optimism over an end to the US-China trade war faded, leaving prices set for a weekly loss after days of wild gyrations.
Brent crude was down 17 cents, or 0.3 per cent, at $60.21 a barrel by 0053 GMT, while US West Texas Intermediate (WTI) was off by 14 cents, or 0.3 per cent, at $54.95.
Brent has traded in a range of nearly $5 this week and is heading for the first weekly loss in five. US crude has traded similarly and is heading for its first loss in three weeks.
Gloom over the dispute between Washington and Beijing left investors shrugging off a commitment from Organization of the Petroleum Exporting Countries (OPEC) producers to trim output, with more signs emerging that global economic growth is being stunted by the trade row.
“Again it is a battle between the forces of OPEC and those of slowing global growth and thus demand,” said Greg McKenna, strategist at McKenna Macro.
The hit to market confidence came as economists in a Reuters poll predicted the US-China trade spat will worsen or at best stay the same over the coming year.
Nearly 80 per cent of more than 60 economists said US-China trade relations would either worsen or stay the same by the end of next year. The median probability of a US recession in the next two years held at a high of 45 per cent, and the chance of one in the next 12 months held at 30 per cent.
Those prospects were enough to overshadow OPEC’s agreement on Thursday to trim oil output by asking over-producing members Iraq and Nigeria to bring production in line with targets. The group is striving to prevent a glut amid soaring US production and the slowing global economy.
A market-monitoring committee formed by OPEC and allied producers, a grouping known as OPEC+, met on Thursday in Abu Dhabi ahead of policy discussions set for Vienna in December.
OPEC+ has over-complied on average with its agreed cut of 1.2 million barrels per day (bpd) as Iranian and Venezuelan exports collapsed due to sanctions. But some members, such as Iraq and Nigeria, have been producing above their quota.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 12.20.
The projected lower bound is: 10.73.
The projected closing price is: 11.47.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white 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 5 falling windows in the last 50 candles–this makes the current falling window even more bearish. The two candles preceding the falling window were black, which makes this pattern even more bearish.
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 40.0000. 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 47.27. 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 63 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 -49. 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 21 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed down -0.210 at 11.470. Volume was 24% above average (neutral) and Bollinger Bands were 43% narrower than normal.
Open High Low Close Volume___
11.320 11.520 11.280 11.470 35,739,240
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 11.69 11.67 11.73
Volatility: 42 40 40
Volume: 28,319,752 28,528,380 27,422,370
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 2.2% 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 6 periods.
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