United States Oil (USO) pressured by rising supply going into a market
Oil prices fell on Thursday, pressured by rising supply going into a market in which consumption is expected to slow down amid a glum economic outlook.
Front-month Brent crude oil futures were trading at $65.90 per barrel at 0254 GMT, down 22 cents, or 0.3 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $55.95, down 30 cents, or 0.5 percent.
Meanwhile, data released this week showed economic contraction in industrial powerhouses Japan and Germany in the third quarter.
At the same time, supply has been surging, especially due to a 22 percent rise in output in U.S. crude oil production this year to a record 11.6 million barrels per day (bpd).
“Producers…have more barrels than they can sell at the moment,” said Mercatus Energy Advisors’ Corley.
As a result, oil inventories are rising. The American Petroleum Institute said late on Wednesday that crude inventories rose by 8.8 million barrels in the week to Nov. 9 to 440.7 million, compared with analyst expectations for an increase of 3.2 million barrels.
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 13.68.
The projected upper bound is: 12.65.
The projected lower bound is: 11.14.
The projected closing price is: 11.90.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 1 white candles and 9 black candles for a net of 8 black candles. During the past 50 bars, there have been 19 white candles and 28 black candles for a net of 9 black candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is 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 10.9223. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 13 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 21.44. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 29 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 -140.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 13 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 sell 25 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed up 0.260 at 11.950. Volume was 147% above average (neutral) and Bollinger Bands were 101% wider than normal.
Open High Low Close Volume___
12.015 12.170 11.880 11.950 55,488,792
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 12.80 14.47 13.81
Volatility: 40 34 32
Volume: 37,356,084 24,189,020 21,436,210
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 13.5% 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 moderate flows of volume out of USO (mildly bearish). Our trend forecasting oscillators are currently bearish on USO and have had this outlook for the last 21 periods. Our momentum oscillator is currently indicating that USO is currently in an oversold condition.