United States Oil (USO) prices edged down after a Russian minister said the nation and OPEC may boost crude output

United States Oil (USO) prices edged down after a Russian minister said the nation and OPEC may boost crude output

United States Oil (USO) prices edged down after a Russian minister said the nation and OPEC may boost crude output

Oil prices edged down on Tuesday after a Russian minister said the nation and OPEC may boost crude output to fight the United States for market share, checking a recent rally driven by tighter global production.

Brent crude oil futures were at $71 a barrel at 0431 GMT, down 18 cents, or 0.25 percent, from their last close. Brent ended down 0.5 percent on Monday.

U.S. West Texas Intermediate (WTI) crude futures were at $63.32 per barrel, down 8 cents, or 0.13 percent, from their previous settlement. WTI fell 0.8 percent on Monday.

Russian Finance Minister Anton Siluanov said over the weekend that Russia and OPEC may decide to boost production to fight for market share with the United States, but this would push oil as low as $40 per barrel.

“There is a growing concern that Russia will not agree on extending production cuts and we could see them officially abandon it in the coming months,” said Shayne Heffernan, CEO and Founder of Heffx.

The Organization of the Petroleum Exporting Countries and its allies including Russia, known as OPEC+, will meet in June to decide whether to continue withholding supply. That comes after they previously agreed to crimp output by 1.2 million barrels per day (bpd) from Jan. 1 for six months.

Ballooning shale oil output in the United States has also helped rein in benchmark crude prices.

“Rising U.S. shale output has … imposed headwinds for oil prices,” said Shayne Heffernan.

U.S. crude oil output from seven major shale formations is expected to rise by about 80,000 bpd in May to a record 8.46 million bpd, the U.S. Energy Information Administration said in a report.

However, losses in oil prices were checked by tighter supplies from Iran and Venezuela amid signs the United States will further toughen sanctions on those two OPEC producers, and on the threat that renewed fighting could wipe out crude production in Libya.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 12.35.

The projected upper bound is: 13.73.

The projected lower bound is: 12.81.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 26 white candles and 23 black candles for a net of 3 white candles.

An on-neck line occurred. This is a bearish pattern where prices should move lower when the white candlestick’s (i.e., the most recent) low is penetrated.

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.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 47.7064. 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 67.22. 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 sell 2 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 53. This is not a topping or bottoming area. The last signal was a sell 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 10 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed down -0.060 at 13.240. Volume was 39% below average (neutral) and Bollinger Bands were 6% wider than normal.

Open High Low Close Volume___
13.230 13.289 13.140 13.240 15,836,518

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 13.20 12.14 12.90
Volatility: 19 24 37
Volume: 20,502,482 20,389,144 25,086,294

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.

Summary

UNTD ST OIL FUND is currently 2.7% above its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 27 periods.

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