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United States Oil (USO) prices rise as Trump flags deeper output cuts

United States Oil (USO) prices rise as Trump flags deeper output cuts

Oil prices rose Tuesday after US President Donald Trump said producers are considering cutting 20 million barrels per day – more than double the figure publicly announced – to help the virus-hit sector.

US benchmark West Texas Intermediate rose nearly 2% to trade at $22.85, while international benchmark Brent crude climbed 1.5% to trade at $32.26.OPEC producers dominated by Saudi Arabia and allies led by Russia thrashed out a compromise deal on Sunday to cut production by nearly 10 million barrels per day from May.

The agreement was aimed at boosting prices after months of heavy falls, with the COVID-19 outbreak sapping demand as countries around the world have put their populations under lockdown.

A Saudi-Russian price war compounded the crisis, with both countries ramping up production as they bid to hold on to market share and undercut US shale producers.

Prices fluctuated after the output cut was announced, however, with traders still nervous about a supply glut amid estimates that demand has plunged 25 million barrels per day.

Trump said Monday that the cuts may be deeper than the headline figure — with top producers considering slashing output by 20 million barrels a day under the deal.

“People are saying 10 million but we think the number they will actually hit is going to be closer to 20 million barrels a day,” Trump said at a press briefing about the coronavirus, referring to how much oil production would be cut. He did not go into specifics.

Traders at Heffx, said that attention was still firmly on how much demand would collapse due to the pandemic.

“That has yet to be quantified and means there are still downside risks to oil,” they said.

Technical Indicators

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 6.27.

The projected lower bound is: 3.35.

The projected closing price is: 4.81.

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 20 white candles and 30 black candles for a net of 10 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 31.7204. This is not an overbought or oversold reading. The last signal was a buy 7 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 38.72. 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 6 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 6. This is not a topping or bottoming area. The last signal was a sell 3 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 9 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed down -0.050 at 4.930. Volume was 120% above average (neutral) and Bollinger Bands were 29% narrower than normal.

Open     High      Low     Close     Volume___
4.965 5.070 4.850 4.930 125,551,128
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 4.97 7.91 10.87
Volatility: 157 142 79
Volume: 190,473,296 87,726,680 40,603,676

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 54.6% 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 61 periods.

HEFFXhttp://www.heffx.com
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

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