United States Oil (USO) slipped as tensions escalated between the United States and China
Oil prices slipped for a third consecutive session on Wednesday as tensions escalated between the United States and China prior to this week’s trade talks, raising uncertainties for global economic growth and oil demand.
U.S. industry data showing a bigger-than-expected rise in stockpiles at the world’s top oil producer also depressed prices. Brent crude futures fell 24 cents, or 0.4%, to $58.00 a barrel by 0442 GMT, while U.S. West Texas Intermediate crude was at $52.39, down 24 cents or 0.5%.
Negotiators from the world’s top two economies will meet in Washington on Thursday and Friday in the latest effort to hammer out a deal aimed at ending a long-running trade dispute that has slowed global economic growth.
But tensions between the pair rose this week after the United States imposed visa restrictions on Chinese officials for the detention or abuse of Muslim minorities, while a row escalated over comments by a leading U.S. National Basketball Association official in support of protests in Hong Kong.
In the United States, meanwhile, crude stockpiles rose by 4.1 million barrels in the week ended Oct. 4 to 422 million, data from industry group the American Petroleum Institute showed on Tuesday. Analysts had expected an increase of 1.4 million barrels, a Reuters poll showed.
The weekly U.S. Energy Information Administration (EIA) report is due at 10:30 a.m. EDT on Wednesday.
The EIA said on Tuesday U.S. crude production is expected to rise by 1.27 million barrels per day (bpd) in 2019 to a record 12.26 million bpd, slightly above its previous forecast for a rise of 1.25 million bpd.
Output in 2020 is forecast to rise by 910,000 bpd to 13.17 million bpd, it said, below its previous estimate of a rise of 990,000 bpd to 13.23 million bpd.
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 11.53.
The projected upper bound is: 11.81.
The projected lower bound is: 9.93.
The projected closing price is: 10.87.
A white body occurred (because prices closed higher than they opened).
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 26 black candles for a net of 2 black candles.
An on-neck line occurred. This is a bearish pattern where prices should move lower when the white candlestick’s (i.e., the most recent) low is penetrated.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 43.9330. This is not an overbought or oversold reading. The last signal was a buy 2 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 36.61. 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 81 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 -92. This is not a topping or bottoming area. The last signal was a buy 1 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 sell 9 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed down -0.150 at 10.890. Volume was 19% below average (neutral) and Bollinger Bands were 24% wider than normal.
Open High Low Close Volume___
10.865 11.020 10.820 10.890 24,475,190
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 11.27 11.57 11.81
Volatility: 20 51 40
Volume: 25,098,282 31,507,118 26,855,472
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 7.8% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of USO (mildly bearish). Our trend forecasting oscillators are currently bearish on USO and have had this outlook for the last 5 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.