United States Oil (USO) rises as Saudi Arabia signals OPEC cuts to continue under new energy minister
Oil rose on Monday on expectations that Saudi Arabia, the world’s largest oil exporter, will continue to support output cuts by OPEC and other producers to prop up prices under new Energy Minister Prince Abdulaziz bin Salman.
Prices climbed for a fourth day and were also supported by comments from the United Arab Emirates’ energy minister that OPEC and its allies are committed to balancing the crude market.
Global benchmark Brent LCOc1 was up 53 cents, or 0.9%, at$62.07 a barrel by 0425 GMT, while U.S. West Texas Intermediate CLc1 was 57 cents, or 1%, higher at $57.09 a barrel.
Salman, a long-time member of the Saudi delegation to the Organization of the Petroleum Exporting Countries (OPEC), was named to the position on Sunday, replacing Khalid al-Falih. Heis the son of Saudi King Salman and this is the first time the energy portfolio has been handed to a member of the royal family.
He helped to negotiate the current agreement between OPEC and non-OPEC countries including Russia, a group known as OPEC+,to cut global crude supply to support prices and balance the market.
A Saudi official said on Sunday that there would be no shift in Saudi and OPEC policy on the cuts and that Prince Abdulaziz would work to strengthen OPEC and non-OPEC cooperation.
“The change at the top doesn’t necessarily mean a shift in policy as much as it’s being viewed as a move to improve relations within OPEC and with non-OPEC producers in the wake of the latest Russian compliance fissures,” said Stephen Innes, Asia Pacific market strategist at Axi Trader.
Russia’s oil output in August exceeded its quota under the OPEC+ agreements.
UAE’s Minister of Energy and Industry Suhail al-Mazrouei said on Sunday that members of OPEC and non-OPEC producers are”committed” to achieving oil market balance.
Asked about possible deeper production cuts, the minister told a news conference in Abu Dhabi that he was not concerned about current oil prices, rather the level of oil inventories.
Trade and geopolitical tensions are affecting the market more than demand and supply, Mazrouei said, but he was quick to rule out hasty steps influenced by the trade war between the United States and China.
Prices on Monday were also supported by a rise in oil imports in China in August, with shipments to the world’s biggest importer up 3% from July and nearly 10% higher in the first eight months of 2019 from a year earlier.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 12.52.
The projected lower bound is: 11.00.
The projected closing price is: 11.76.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 25 black candles for a net of 1 black candles.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 76.7335. This is not an overbought or oversold reading. The last signal was a sell 15 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 54.30. 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 59 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 56. This is not a topping or bottoming area. The last signal was a sell 0 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 17 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed up 0.070 at 11.770. Volume was 23% below average (neutral) and Bollinger Bands were 51% narrower than normal.
Open High Low Close Volume___
11.460 11.850 11.410 11.770 22,340,164
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 11.51 11.69 11.72
Volatility: 42 41 42
Volume: 27,527,208 28,786,946 27,809,526
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 is currently 0.4% 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 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 2 periods.
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