United States Oil (USO) US crude inventories shrank and as major producers cut nearly a third of offshore Gulf of Mexico production ahead of an expected storm
Oil prices rose 4.5 per cent a barrel on Wednesday to their highest level in more than a month after US crude inventories shrank and as major producers cut nearly a third of offshore Gulf of Mexico production ahead of an expected storm.
Brent crude futures settled at US$67.01 a barrel, up US$2.85, or 4.44 per cent. US West Texas Intermediate (WTI) crude futures settled at US$60.43 a barrel, climbing US$2.60, or 4.50 per cent.
Both benchmarks hit their highest prices since late-May.
US crude stocks fell 9.5 million barrels in the week to July 5, shrinking more than triple the 3.1 million-barrel draw analysts had expected as refineries ramped up output, the Energy Information Administration (EIA) said.
“The inventory draw was much stronger than expected,” which helped to push oil prices higher, said Carsten Fritsch, oil analyst at Commerzbank. “Imports dropped and refinery utilisation reached the highest level since the beginning of the year, contributing to the big draw.”
A storm expected to form along the Gulf of Mexico also helped oil prices.
Major oil firms began evacuating and halting production in the Gulf of Mexico ahead of the storm, which is forecast to become a hurricane by the weekend.
“With the evacuation of several platforms in the Gulf of Mexico in advance of a tropical storm, that will curb production,” said Andrew Lipow, president of Lipow Oil Associates.
Chevron Corp, Royal Dutch Shell, BP, Anadarko Petroleum and BHP Group were in the process of removing staff from 15 offshore platforms. Exxon Mobil said it was monitoring the weather to determine if its facilities might be affected.
The Gulf of Mexico is home to 17 per cent of US crude oil output which stands at around 12 million barrels per day (bpd).
Overall, the bias in prices is: Upwards.
The projected upper bound is: 13.33.
The projected lower bound is: 11.70.
The projected closing price is: 12.52.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 5 black candles for a net of 2 black candles. During the past 50 bars, there have been 22 white candles and 25 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 5 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 68.5891. This is not an overbought or oversold reading. The last signal was a sell 7 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 61.33. 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 18 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 155.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 7 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 16 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed up 0.490 at 12.530. Volume was 32% above average (neutral) and Bollinger Bands were 33% wider than normal.
Open High Low Close Volume___
12.330 12.565 12.300 12.530 32,970,628
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 12.08 12.08 12.28
Volatility: 45 44 41
Volume: 28,620,238 28,672,472 27,432,370
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 2.0% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into USO (mildly bullish). Our trend forecasting oscillators are currently bullish on USO and have had this outlook for the last 10 periods.