United States Oil (USO) on U.S.-China hopes, improved demand outlook
Oil prices rose on Monday, buoyed by an improved outlook for crude demand as better-than-expected U.S. jobs growth added to market hopes a preliminary U.S.-China trade deal would be reached this month.
Brent crude futures gained 47 cents to settle at $62.17 a barrel. US West Texas Intermediate gained 34 cents or 0.6% to settle at $56.54.
Both benchmarks traded near the highest in more than a month as market optimism about progress in U.S.-China trade negotiations propelled U.S. stock indexes to record highs on Monday, elevating oil. Energy shares gained the most of the 11 major S&P 500 sectors.
Chinese President Xi Jinping and U.S. President Donald Trump have been in continuous touch through “various means,” China said on Monday, when asked when and where the two leaders might meet to sign a trade deal.
“Both sides (China and the United States) are talking up the trade deal to a large degree. And you have the Federal Reserve leaning into this better-looking economic situation, which lifts all boats,” said John Kilduff, a partner at Again Capital LLC.
On Friday, prices jumped by about $2 a barrel after U.S. officials said a deal could be signed this month.
Improved U.S. jobs growth numbers in October and the upward revisions of the two previous months, reported on Friday, also eased fears of a global economic slowdown that would slow crude demand, oil-market analysts said.
Nonfarm payrolls increased by 128,000 jobs last month, U.S. Labor Department data showed. Economists polled by Reuters had forecast payrolls rising by 89,000 jobs in October. The economy also created 95,000 more jobs in August and September than previously estimated.
Federal Reserve’s interest rate cut last week and recent weakness in the U.S. dollar has also helped lift prices, analysts said. Demand for crude oil, which is traded in U.S. dollars, typically strengthens when the dollar weakens.
Hedge funds have started to rebuild long positions in crude and fuels.
Capping gains, U.S. crude oil inventories were forecast to have risen by 2.7 million barrels last week, a preliminary Reuters poll showed ahead of weekly data on Wednesday.
But last week’s shutdown of TC Energy Corp’s 590,000 barrel-per-day Keystone pipeline, a main artery for Canadian heavy crude imports into the United States, following a 9,000-barrel oil spill, could impact the data.
The shutdown could have caused supplies at Cushing, Oklahoma, the delivery point for U.S. futures, to have risen only slightly or even decline, which would soften the impact should data show an overall crude build, said Robert Yawger, director of energy futures at Mizuho in New York.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 12.66.
The projected lower bound is: 10.98.
The projected closing price is: 11.82.
A black body occurred (because prices closed lower 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 rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 8 rising windows in the last 50 candles–this makes the current rising window even more 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 55.1887. This is not an overbought or oversold reading. The last signal was a sell 4 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 57.69. 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 100 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 122.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 4 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 15 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed up 0.120 at 11.810. Volume was 14% below average (neutral) and Bollinger Bands were 24% narrower than normal.
Open High Low Close Volume___
11.930 11.990 11.780 11.810 24,344,380
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 11.60 11.55 11.91
Volatility: 30 45 39
Volume: 21,407,092 27,414,280 25,867,648
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 up today (bullish) 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 0.9% below its 200-period moving average and is in an upward trend. Volatility is 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 4 periods.