United States Oil (USO) recent data revealed a weekly decline in domestic supplies

United States Oil (USO) recent data revealed a weekly decline in domestic supplies

United States Oil (USO) recent data revealed a weekly decline in domestic supplies

Oil futures split ways on Thursday, with U.S. prices up a fourth straight session after recent data revealed a weekly decline in domestic supplies, but global prices ending lower in the wake of a reported delay in the U.S.-China trade discussions and a slowdown in OPEC output cuts.

Shayne Heffernan said “nothing in the current numbers suggests a rally in the oil price”

April West Texas Intermediate crude CLJ9, -0.07%  rose 35 cents, or 0.6%, to settle at $58.61 a barrel on the New York Mercantile Exchange, logging a fourth straight session climb. It settled at its highest since mid-November, according to FactSet data.

May Brent crude LCOK9, +0.03% meanwhile, edged down by 32 cents, or 0.5%, to $67.23 a barrel on ICE Futures Europe. It settled at a four-month high a day earlier.

The headline draw in U.S. oil supplies reported Wednesday “was correctly digested as positive but the underlying reasons for the draw were the real bullish development,” said Tyler Richey, co-editor of the Sevens Report. “Domestic crude oil production slipped for the first time this year … meanwhile, net imports remained suppressed,” with U.S. sanctions on Venezuela being the primary driver of the import decline.

On Wednesday, the Energy Information Administration reported that U.S. crude supplies unexpectedly fell by 3.9 million barrels for the week ended March 8. The EIA also reported that total domestic crude production inched down from record territory, down 100,000 barrels to 12 million barrels a day.

Bloomberg News reported Thursday morning that a meeting between Trump and Chinese President Xi Jinping will be delayed until at least April. That along with weaker-than-expected economic data from China, has contributed to losses for benchmark U.S. stock indexes Thursday which, in turn, fed risk-off sentiment.

Robert Yawger, director of energy at Mizuho Securities U.S.A., said that the dynamic for oil remains supportive of higher prices. “There are a lot of strong bullish elements here,” he said.

So far this week, futures contracts for WTI crude have jumped 4.5%, while the international benchmark has gained 2.2%.

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 11.61.

The projected upper bound is: 12.82.

The projected lower bound is: 11.72.

The projected closing price is: 12.27.

Candlesticks

During the past 10 bars, there have been 3 white candles and 6 black candles for a net of 3 black candles. During the past 50 bars, there have been 32 white candles and 17 black candles for a net of 15 white candles.

A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.

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 91.4163. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 13 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 65.20. 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 53 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 190.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 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 0 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed up 0.030 at 12.220. Volume was 31% below average (neutral) and Bollinger Bands were 67% narrower than normal.

Open High Low Close Volume___
12.220 12.270 12.136 12.220 21,184,588

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

Moving Averages: 10-period 50-period 200-period
Close: 11.87 11.33 12.98
Volatility: 24 31 39
Volume: 23,667,242 24,879,514 25,327,772

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 5.8% below 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 5 periods.

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