United States Oil (USO) prices ease on scant details of U.S.-China trade deal
Oil prices eased on Monday as scant details on the first phase of a trade deal between the United States and China undercut last week’s optimism over the thaw that helped to lift crude markets by 2%.
Brent crude futures LCOc1 edged down by 25 cents to $60.26 a barrel by 0436 GMT, while U.S. West Texas Intermediate (WTI) crude futures CLc1 was at $54.45 a barrel, down 25 cents.
Both contracts rose more than 3% last week, their first weekly gain in three.
“There is an argument that the oil market trading during U.S. hours on Friday have already had a chance to price (in) the news on the trade dispute and the better outlook for global demand,” said CMC Markets chief strategist Michael McCarthy.
“So traders are reluctant to push it further given those very strong gains.”
Most of the gains posted on Friday, however, had come after an Iranian oil tanker was attacked off Saudi Arabia’s coast in the Red Sea. Investigations are under way to determine if the tanker was hit by missiles, which could ratchet up tensions between Tehran and Riyadh if confirmed.
The emergence of a “phase 1” trade deal between the United States and China and a goodwill move by Washington to suspend threatened tariffs on Chinese products also helped to lifted global financial markets on Monday.
But investors remained cautious given that few details emerged from the talks.
The trade war has pressure China’s trade, with its exports to the United States falling 10.7% from a year earlier in dollar terms over January-September, Chinese customs spokesman Li Kuiwen told reporters.
China’s imports from the United States on the other hand have fallen 26.4% in dollar terms during the first nine months.
China’s demand for oil remains strong, however, with its September imports reflecting a 10.8% rise from a year earlier as refiners ramped up output amid stable profit margins and solid fuel demand.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 11.49.
The projected upper bound is: 12.31.
The projected lower bound is: 10.53.
The projected closing price is: 11.42.
A white body occurred (because prices closed higher 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 25 white candles and 25 black 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 7 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 75.8577. This is not an overbought or oversold reading. The last signal was a buy 5 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 49.33. 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 84 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 16. This is not a topping or bottoming area. The last signal was a buy 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 sell 12 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed up 0.230 at 11.420. Volume was 23% above average (neutral) and Bollinger Bands were 31% wider than normal.
Open High Low Close Volume___
11.240 11.460 11.240 11.420 36,884,152
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 11.10 11.53 11.84
Volatility: 30 48 39
Volume: 26,467,234 31,005,198 26,758,974
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 3.5% below its 200-period moving average and is in an downward trend. Volatility is high 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 bearish on USO and have had this outlook for the last 8 periods.