United States Oil (USO) weakened as worries about the global economy weighed
Oil prices weakened on Thursday as worries about the global economy weighed and equity markets were under pressure as uncertainty over the outlook for U.S. interest rate cuts left investors on edge.
Traders are awaiting a speech from Federal Reserve Chair Jerome Powell on Friday in Jackson Hole, Wyoming, that could indicate whether the U.S. central bank will continue to cut interest rates.
Brent crude LCOc1 fell 47 cents, or 0.8%, to $59.83 a barrel by 12:34 p.m. ET (1634 GMT), while U.S. West Texas Intermediate crude CLc1 fell 44 cents, or 0.8%, to $55.24.
The Jackson Hole speech is important for oil as signals from the Fed on monetary easing affect the U.S. dollar. A weaker U.S. currency tends to support oil prices, and the dollar eased on Thursday against a basket of currencies .DXY.
Concerns over the impact of the trade tensions between Washington and Beijing on the U.S. economic expansion, the longest on record, prompted the Fed to cut interest rates last month for the first time since 2008. The prolonged trade spat has sparked worries about growth in oil demand.
Forecasters such as the International Energy Agency have been lowering forecasts for world oil demand.
U.S. President Donald Trump on Wednesday said he was “the chosen one” to address trade imbalances with China, even as congressional researchers warned his tariffs would reduce U.S. economic output by 0.3% in 2020.
Still, the price of Brent is up by about 13% this year, supported by supply cuts led by the Organization of the Petroleum Exporting Countries, and export cuts affecting Iran and Venezuela which are under U.S. sanctions.
Iran said on Wednesday if its oil exports are cut to zero, international waterways would not have the same security as before, cautioning Washington against raising pressure on Tehran.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 12.30.
The projected lower bound is: 10.79.
The projected closing price is: 11.55.
A black body occurred (because prices closed lower than they opened).
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 25 white candles and 23 black candles for a net of 2 white candles.
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 59.5170. 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 49.10. 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 49 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 60. This is not a topping or bottoming area. The last signal was a sell 0 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 7 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed down -0.080 at 11.530. Volume was 22% below average (neutral) and Bollinger Bands were 26% narrower than normal.
Open High Low Close Volume___
11.660 11.700 11.410 11.530 21,792,452
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 11.51 11.70 11.77
Volatility: 41 41 42
Volume: 29,141,054 29,790,488 28,325,588
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 2.1% 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 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 16 periods.
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