United States Oil (USO) should expect significant outperformance
On the morning of publication of the EIA-914 and EIA PSM reports today (October 31), providing US monthly oil production data for August 2018, Rystad Energy analysis indicates that the market should expect significant outperformance of US oil production compared to the EIA’s predictions.
The EIA’s current Short-Term Energy Outlook (STEO) suggests total US oil production growth of 90,000 bpd from July to August 2018 with nationwide oil production averaging 11.05 million bpd in August 2018. According to the EIA, 80,000 bpd of this growth should come from Alaska, whereas the predicted decline in production from the Gulf of Mexico nearly offsets the projected increase from the Lower 48 states excluding the Gulf of Mexico.
However, actual well production data and daily throughout figures from the TAPS pipeline suggests that this projection for Alaska is in fact too optimistic, with August 2018 oil production averaging 428,000 bpd, about 40,000 bpd below the EIA’s expectations. Nevertheless, preliminary production data for the US Gulf of Mexico suggest further growth potential of 60,000-70,000 bpd in August, starkly contrasting the STEO’s projected decline of 50,000 bpd. The growth is largely driven by Anadarko and Hess, which exhibit a combined jump in operated oil production of 66,000 bpd in August amid completion of temporary field maintenance as very limited volumes come from new wells.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 14.48.
The projected lower bound is: 13.10.
The projected closing price is: 13.79.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 23 white candles and 24 black candles for a net of 1 black 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 22.8808. This is not an overbought or oversold reading. The last signal was a buy 3 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 32.61. 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 sell 19 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 -105.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 3 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 15 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed down -0.240 at 13.790. Volume was 53% above average (neutral) and Bollinger Bands were 53% wider than normal.
Open High Low Close Volume___
13.990 14.125 13.771 13.790 31,990,792
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 14.26 14.81 13.82
Volatility: 33 30 30
Volume: 24,573,316 19,491,788 20,626,944
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 0.2% below its 200-period moving average and is in an downward trend. Volatility is relatively normal 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 11 periods.