United States Oil (USO) persistent Iran tensions, this week’s testimony from Fed’s Powell color oil-trading sentiment
Oil futures gained on Tuesday, with U.S. prices logging a fourth straight session gain, buoyed by tensions with Iran that threaten the global flow of oil and by expectations for a weekly decline in U.S. crude supplies.
Concerns over a slowdown in energy demand, however, have kept prices in check.
Traders also awaited Congressional testimony this week from Federal Reserve Chairman Jerome Powell and any hints on the likelihood of an interest-rate cut later this month.
August West Texas Intermediate crude CLQ19, +1.44% rose 17 cents, or 0.3%, to settle at $57.83 a barrel on the New York Mercantile Exchange, following three straight session of gains. The settlement was the highest for a front-month contract since July 1, FactSet data show.
International benchmark September Brent BRNU19, +1.00% which had diverged from its U.S. counterpart a day earlier, climbed 5 cents, or nearly 0.1%, to $64.16 a barrel on ICE Futures Europe.
The string of U.S. oil-price gains “suggests that the corrective pressure has at least eased for now,” said Richard Perry, analyst at Hantec Markets.
Rising tensions between Iran and the United States have brought the two countries close to conflict and threatened the security of major oil transportation choke point, the Strait of Hormuz. Last month, President Donald Trump called off air strikes at the last minute in retaliation for Iran shooting down a U.S. drone.
The European Union on Tuesday urged Iran to reverse its scaled-up uranium enrichment that breaches a nuclear deal it agreed in 2015, Reuters reported. The Trump administration withdrew from the accord last year and imposed oil-focused economic sanctions.
“Geopolitics, and more specifically the threat of more military activity between the U.S. and Iran, is one of the only remaining bullish factors supporting the energy market right now, as the supply fundamentals are roughly balanced between an extension in OPEC+ policy but stubbornly elevated U.S. output,” said Tyler Richey, co-editor of Sevens Report Research.
The demand-side fundamentals, however, are “very unclear thanks to faltering global economic growth and still-simmering trade tensions between the U.S. and China,” he said.
Meanwhile, the Fed’s reaction to some signs of a slowing economy has been a key factor for markets, including for investors assessing whether oil demand will hold up. The interest-rate talk’s impact on the U.S. dollar DXY, +0.01% can also sway oil trading.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 12.80.
The projected lower bound is: 11.23.
The projected closing price is: 12.02.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 2 white candles and 6 black candles for a net of 4 black candles. During the past 50 bars, there have been 22 white candles and 25 black candles for a net of 3 black candles.
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 45.8715. This is not an overbought or oversold reading. The last signal was a sell 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 53.67. 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 17 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 14. This is not a topping or bottoming area. The last signal was a sell 6 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 0.110 at 12.040. Volume was 41% below average (neutral) and Bollinger Bands were 29% wider than normal.
Open High Low Close Volume___
11.980 12.050 11.916 12.040 14,655,867
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 12.03 12.09 12.29
Volatility: 39 42 41
Volume: 27,640,148 28,481,262 27,341,360
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 is currently 2.0% below 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 moderate flows of volume into USO (mildly bullish). Our trend forecasting oscillators are currently bullish on USO and have had this outlook for the last 9 periods.
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