United States Oil (USO) prices fall on slowing demand concerns

United States Oil (USO) prices fall on slowing demand concerns

United States Oil (USO) prices fall on slowing demand concerns

Oil prices fell on Tuesday, offsetting narrow gains in the previous session, as sluggish demand forecasts countered expectations that major producers would prop up oil prices by limiting crude oil output.

International benchmark Brent crude futures LCOc1 were down 48 cents or 0.8%, from the previous settlement, at $58.09 a barrel by 0643 GMT.

U.S. West Texas Intermediate (WTI) CLc1 futures were at $54.52 per barrel, down by 41 cents, or 0.8%, from the last close.

U.S. oil output from seven major shale formations is expected to rise by 85,000 barrels per day (bpd) in September, to a record 8.77 million bpd, the U.S. Energy Information Administration forecast in a report.

Gloomy forecasts for the global economy and oil demand growth have also dragged on oil prices as the trade dispute between the United States and China escalates.

“The swift reaction from Saudi Arabia will likely stabilize oil prices, but the oil price probably won’t move much above $60 per barrel until there is evidence of progress in U.S.-China trade negotiations,” said Innes.

China’s central bank lowered its official yuan midpoint for the ninth straight day to a fresh 11-year low on Tuesday to reflect broad weakness in the local unit.

A lower yuan raises the cost of dollar-denominated oil imports in China, the world’s biggest crude oil importer.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 11.84.

The projected upper bound is: 12.12.

The projected lower bound is: 10.61.

The projected closing price is: 11.37.

Candlesticks

A black body occurred (because prices closed lower 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 23 white candles and 25 black candles for a net of 2 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.

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 68.4161. This is not an overbought or oversold reading. The last signal was a buy 2 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 45.63. 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 41 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 -29. This is not a topping or bottoming area. The last signal was a buy 1 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 sell 7 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed up 0.080 at 11.360. Volume was 11% below average (neutral) and Bollinger Bands were 22% narrower than normal.

Open     High      Low     Close     Volume___
11.370 11.440 11.260 11.360 24,131,968
Moving Averages: 10-period     50-period     200-period
Close: 11.39 11.61 11.87
Volatility: 50 42 41
Volume: 35,303,488 29,672,712 28,143,312

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 4.3% 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.

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