United States Oil (USO) domestic supplies rise an 8th week
U.S. oil prices climbed Thursday, but finished below the session’s best level as data from the U.S. government showed that domestic-crude supplies rose more than expected and for an eighth week in a row as output reached a record.
Tariq Zahir, managing member at Tyche Capital Advisors, said he wasn’t surprised to see a bounce in oil prices following an “extreme selloff in the energy complex this week,” but also said he expected the bounce back to be “rather short lived.” U.S. prices settled off the session’s high.
On Thursday, the Energy Information Administration reported that domestic-crude supplies rose for an eighth straight week—up 10.3 million barrels for the week ended Nov. 9. Data were released a day later than usual because of Monday’s Veterans Day holiday.
U.S. stockpiles have now climbed 48 million barrels since mid-September, according to Matt Smith, commodity analyst at ClipperData.
Analysts surveyed by S&P Global Platts had forecast a weekly rise of 2.3 million barrels, while the American Petroleum Institute on Wednesday reported an increase of 8.8 million barrels.
Gasoline stockpiles, however, declined by 1.4 million barrels last week, while distillate stockpiles fell by 3.6 million barrels, according to the EIA. The S&P Global Platts survey had shown expectations for supply declines of 894,000 barrels in gasoline and 2.7 million barrels for distillates.
A supply build has driven the market’s down move, as has weakening global economic growth and the decision by the Trump administration to grant waivers to major buyers of Iranian crude following the enactment of sanctions, a factor that had been expected to keep most Iranian oil off the market.
The U.S., Russia and Saudi Arabia are pumping crude at record levels, causing global supply to significantly outrun demand, a monthly update from the International Energy Agency showed earlier this week.
Yet the price drop prompted the Organization of the Petroleum Exporting Countries and its allies, including Russia, to signal on Sunday that it could enact a joint production cut. Such a move would come just months after the group decided to ramp up production after more than a year of holding back output.
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 13.59.
The projected upper bound is: 12.69.
The projected lower bound is: 11.18.
The projected closing price is: 11.93.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 1 white candles and 9 black candles for a net of 8 black candles. During the past 50 bars, there have been 19 white candles and 28 black candles for a net of 9 black candles.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 17.2414. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 14 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 22.24. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 30 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 -116.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 14 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 26 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed up 0.030 at 11.980. Volume was 75% above average (neutral) and Bollinger Bands were 107% wider than normal.
Open High Low Close Volume___
11.990 12.155 11.930 11.980 39,391,896
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 12.65 14.42 13.80
Volatility: 40 34 32
Volume: 37,689,880 24,666,076 21,532,798
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 13.2% 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 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 22 periods. Our momentum oscillator is currently indicating that USO is currently in an oversold condition.