United States Oil (USO) The OPEC Agreement Puts A Floor Under Oil Prices
Since its December 2016 oil production-cut deal came into effect, the Organisation of Petroleum Exporting Countries (OPEC) has seen crude oil prices more than double, following the market rebound from the lows of early 2016. Due to the global anticipation of the Cartel’s voluntary supply withdraws – aimed at further sustaining the technical price recovery – prices have steadily continued to trend higher since the 2014 Brent Crude oil contract plunged.
Outside of OPEC’s sphere of manageable influence, the US shale oil industry remains the greatest threat to global supply/demand imbalances since its surge of over 5.6 mpb in production – or over 140 percent from the 2008 production levels of 3.97 mbpd, capturing a large market share and diminishing OPEC’s ability to bully the market to its will. On that same note, US oil stockpiles – whilst lingering near their five-year average from 2013 to 2018 – remain approximately 29 percent above their 2008-2013 five-year averages. These historically high stockpiles drive home the potential risk of sustained high oil exports from the world’s largest economy, even with the shale oil industry facing a lower growth rate while still accounting for around 80 percent of total global output growth in 2018.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 13.47.
The projected upper bound is: 14.68.
The projected lower bound is: 13.38.
The projected closing price is: 14.03.
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 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 26 white candles and 22 black candles for a net of 4 white 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 3 rising windows in the last 50 candles–this makes the current rising window even more bullish.
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 78.9172. This is not an overbought or oversold reading. The last signal was a sell 5 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 59.41. 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 sell 22 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 281.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 2 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 1 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed up 0.710 at 14.020. Volume was 68% above average (neutral) and Bollinger Bands were 32% narrower than normal.
Open High Low Close Volume___
13.710 14.030 13.591 14.020 32,987,952
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 13.38 13.77 12.24
Volatility: 40 30 27
Volume: 19,750,924 19,299,534 18,250,116
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 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 14.6% above 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 17 periods.