United States Oil (USO) prices have been underpinned by tightening global supplies and signs of demand picking up

United States Oil (USO) prices have been underpinned by tightening global supplies and signs of demand picking up

United States Oil (USO) prices have been underpinned by tightening global supplies and signs of demand picking up

Brent oil prices rose on Thursday, topping $70 per barrel for the first time in nearly five months, as expectations of tight global supply outweighed pressure from rising U.S. production and less robust global demand indicators.

Brent futures touched $70.03, its highest level since Nov. 12, when it last traded above $70. The international benchmark for oil prices settled 9 cents higher at $69.40 a barrel.

U.S. West Texas Intermediate crude settled 36 cents lower at $62.10 a barrel on Thursday. The contract dropped 12 cents in the previous session after briefly hitting $62.99, also the highest since November.

Global benchmark Brent has gained 30 percent this year, while WTI has gained 38 percent. Prices have been underpinned by tightening global supplies and signs of demand picking up.

Trade talks between the United States and China made “good headway” last week in Beijing and the two sides aim to bridge differences during further talks, White House economic adviser Larry Kudlow said on Wednesday.

Crude oil is also supported by an agreement between OPEC and allies such as Russia, a group known as OPEC+, to reduce oil output by about 1.2 million bpd this year.

On Thursday, OPEC member Libya was on the brink of open war between the North African country’s main political factions. General Khalifa Haftar ordered his forces to march on Tripoli, the seat of the United Nations-recognized government.

Libya has played an outsize role in balancing the oil market because ongoing conflict has contributed to sharp swings in the nation’s output. The involuntary disruptions have helped OPEC tighten the market.

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 11.99.

The projected upper bound is: 13.44.

The projected lower bound is: 12.47.

The projected closing price is: 12.96.

Candlesticks

A black body occurred (because prices closed lower 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 28 white candles and 21 black candles for a net of 7 white candles.

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 90.2439. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 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 69.26. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 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 126.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 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 3 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed down -0.070 at 12.920. Volume was 37% below average (neutral) and Bollinger Bands were 22% narrower than normal.

Open High Low Close Volume___
12.980 13.040 12.860 12.920 17,377,004

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

Moving Averages: 10-period 50-period 200-period
Close: 12.59 11.86 12.91
Volatility: 24 26 38
Volume: 20,399,074 20,757,560 25,286,458

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 0.1% 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 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 20 periods.

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