United States Oil (USO) production continues to soar despite the falling oil rig count

United States Oil (USO) production continues to soar despite the falling oil rig count

United States Oil (USO) production continues to soar despite the falling oil rig count

Crude oil futures were lower in mid-morning trade in Asia Monday, retracing gains from last Friday after US crude production was reported to have hit a fresh record high of 12.4 million b/d.

“US crude oil production continued to soar despite the falling oil rig count and touched a fresh record high of 12.4 million b/d thanks to a 30% increase in Gulf of Mexico output,” UOB analysts said in a report Monday.

Production in US Gulf of Mexico waters recorded the largest month-to-month increase in August as output recovered following Hurricane Barry, the US Energy Information Administration said late last week. August marked the first month that US Gulf production averaged over 2 million b/d.

In its October 8 Short-Term Energy Outlook, the EIA had forecast US oil production to climb to 13 million b/d by December and then to almost 13.4 million b/d by the end of 2020.

Production rose even as weekly US rig count data from Baker Hughes posted a second consecutive week of decline. The total oil rig count fell by 5 to 691 last week, the lowest since April 2017, the company said Friday.

Meanwhile, Russia recorded 47.5 million mt, or around 11.23 million b/d, of crude and condensate production in October, above its target under the current OPEC+ agreement, preliminary data released Saturday by the Central Dispatching Unit of the Russian Energy Ministry showed.

The country had committed to cut around 230,000 b/d from its October 2018 output of 11.42 million b/d under the current OPEC+ agreement.

Analysts noted that US dollar weakness also remains in focus after the US dollar index touched a 10-day low on Friday.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 12.55.

The projected lower bound is: 10.84.

The projected closing price is: 11.69.


A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white 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 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 36.5591. This is not an overbought or oversold reading. The last signal was a sell 3 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 55.31. 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 99 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 67. This is not a topping or bottoming area. The last signal was a sell 3 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 buy 14 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed up 0.390 at 11.690. Volume was 7% below average (neutral) and Bollinger Bands were 27% narrower than normal.

Open     High      Low     Close     Volume___
11.450 11.760 11.440 11.690 26,235,822
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 11.55 11.54 11.91
Volatility: 30 46 39
Volume: 20,737,938 27,608,544 25,950,128

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 1.9% below its 200-period moving average and is in an upward trend. Volatility is 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 3 periods.

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