Home Commodities United States Oil (USO) rose more than US$1 a barrel after news...

United States Oil (USO) rose more than US$1 a barrel after news that China and the United States were resuming trade talks

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United States Oil (USO) rose more than US$1 a barrel after news that China and the United States were resuming trade talks

Oil prices rose more than US$1 a barrel on Tuesday after news that China and the United States were resuming trade talks ahead of a meeting at the G-20 summit later this month, spurring hopes that the two countries would resolve an ongoing trade war.

Rising tensions in the Middle East after last week’s tanker attacks, with the US planning to send more troops to the Middle East, also lent support.

US West Texas Intermediate crude futures rose US$1.97, or 3.8 per cent, to settle at US$53.90 a barrel. Brent crude futures gained US$1.20, or 2 per cent, to settle at US$62.14 a barrel.

“Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting,” US President Donald Trump tweeted.

Fears of a confrontation between Iran and the United States have mounted since last Thursday’s oil tanker attacks, which Washington has blamed on Tehran. Iran has denied involvement.

Mr Trump said he was prepared to take military action to stop Tehran having a nuclear bomb but left open whether he would sanction the use of force to protect Gulf oil supplies.

Iran on Monday said it would breach internationally agreed curbs on its stock of low-enriched uranium within 10 days, adding that European nations still had time to save a landmark nuclear deal.

Acting US Defence Secretary Patrick Shanahan announced on Monday the deployment of about 1,000 more troops to the Middle East for what he said were defensive purposes, citing concerns about a threat from Iran.

Market participants are also awaiting a meeting between the Organization of the Petroleum Exporting Countries and other producers including Russia, a group known as Opec+, to decide whether to extend a supply reduction pact that ends this month.

Opec and non-Opec states are discussing holding meetings on July 10-12 in Vienna, a date range proposed by Iran, Opec sources said on Tuesday.

Russian Energy Minister Alexander Novak said on Tuesday it was too early to make any decisions about the future of the agreement because of market uncertainties.

Oil prices have fallen by more than 15 per cent from April’s 2019 highs, partly because of concerns over the US-China trade war and disappointing economic data.

Overall, the bias in prices is: Downwards.

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

By the way, prices are vulnerable to a correction towards 11.96.

The projected upper bound is: 11.94.

The projected lower bound is: 10.48.

The projected closing price is: 11.21.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 23 white candles and 26 black candles for a net of 3 black 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 4 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 59.4470. This is not an overbought or oversold reading. The last signal was a buy 8 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 42.95. 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 3 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 33. This is not a topping or bottoming area. The last signal was a buy 7 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 1 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed up 0.440 at 11.250. Volume was 55% above average (neutral) and Bollinger Bands were 93% wider than normal.

Open High Low Close Volume___
10.990 11.310 10.960 11.250 36,092,800

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 10.98 12.50 12.47
Volatility: 48 39 40
Volume: 30,506,336 25,700,982 26,289,100

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 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 9.8% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 31 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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