United States Oil (USO) rises, supported by US fuel stock draws but weighed by crude build

United States Oil (USO) rises, supported by US fuel stock draws but weighed by crude build

United States Oil (USO) rises, supported by US fuel stock draws but weighed by crude build

Oil prices rose about 1 per cent on Thursday after draws in US fuel inventories, but gains were capped by a larger-than-expected rise in crude stockpiles and a series of weak economic figures.

Global benchmark Brent crude rose 49 cents, or 0.8 per cent, to settle at US$59.91 a barrel. US WTI crude gained 57 cents, or 1.1 per cent, to settle at US$53.93 a barrel.

US petrol stocks fell by 2.6 million barrels in the week to Oct 11, while distillate stockpiles, which include diesel and heating oil, fell by 3.8 million barrels, the US Energy Information Administration said on Thursday.

But a soaring rise in crude inventories offset the draws. Crude stocks rose by 9.3 million barrels, far surpassing estimates for a build of 2.8 million barrels.

The rise was the result of a reduction in refining output for the week to its lowest capacity use nationwide since Hurricane Harvey in September 2017. Refining capacity use fell to 83.1 per cent as refiners shut in capacity across the country.

The United States imposed sanctions on COSCO Shipping Tanker (Dalian) Co and subsidiary COSCO Shipping Tanker (Dalian) Seaman & Ship Management Co for allegedly carrying Iranian oil.

Adding to concerns about the global economy, and therefore energy demand, US retail sales fell for the first time in seven months, while housing starts and industrial output dropped as well. Earlier data showed a moderation in job growth and services sector activity.

“If we see more indications of slowing demand, I think the market is going to continue to sink lower,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.

Brexit developments gave oil prices some support. European Union leaders gave their unanimous backing to a Brexit deal with Britain on Thursday, putting the onus on Prime Minister Boris Johnson to secure the British parliament’s approval for the deal in a vote in two days.

Analysts have said any agreement that avoids a no-deal Brexit should boost economic growth and oil demand.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 11.48.

The projected upper bound is: 12.17.

The projected lower bound is: 10.41.

The projected closing price is: 11.29.

Candlesticks

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 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 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 37.2307. This is not an overbought or oversold reading. The last signal was a buy 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 47.76. 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 88 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 47. This is not a topping or bottoming area. The last signal was a buy 8 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 up 0.140 at 11.280. Volume was 41% below average (neutral) and Bollinger Bands were 0% narrower than normal.

Open     High      Low     Close     Volume___
11.065 11.310 11.006 11.280 17,612,624
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 11.12 11.53 11.87
Volatility: 26 48 39
Volume: 24,161,324 29,359,576 26,588,596

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 4.9% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 12 periods.

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