Oil rebounded from its worst loss in a week as traders focused on tightening U.S. crude stockpiles while Europe’s Central Bank signaled it was teeing up stimulus for the flagging economy.
Futures climbed as much as 2% in New York Thursday, after sliding 1.6% the day before. After mostly discounting the stockpile report on Wednesday, investors seemed to reassess the outlook and see buying opportunities, analysts said. The ECB, meanwhile, said it would consider options including rate cuts and renewed quantitative easing, even as President Mario Draghi warned the economy was looking “worse and worse.”
Despite demand worries, “tighter supply globally, amid OPEC cuts, Iran sanctions and Venezuelan issues, ultimately support the market,” said Bart Melek, head commodity strategist at TD Securities in Toronto.
Crude has fallen around 15% since late April despite an agreement by OPEC and its allies to restrain output and growing political tensions between the U.S. and Iran. Still, U.S. oil inventories fell by 10.8 million barrels last week to the lowest since late March, while production dropped by the most in almost two years, according to an Energy Information Administration report on Wednesday.
“That was a legitimately good draw on crude,” said Vikas Dwivedi, a global oil and gas economist at Macquarie Capital USA Inc. in Houston. “I think people are focusing on that a little more today and giving the worries on the demand side a little bit of a break.”
West Texas Intermediate for September delivery added 52 cents to $56.40 a barrel at 10:45 a.m. on the New York Mercantile Exchange The contract has fallen 3.4% in July, and is on track for only its second monthly loss this year.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 11.96.
The projected upper bound is: 12.37.
The projected lower bound is: 10.78.
The projected closing price is: 11.57.
Candlesticks
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 22 white candles and 26 black candles for a net of 4 black candles.
Momentum Indicators
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.
Stochastic Oscillator
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 45.1088. 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 43.70. 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 29 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 -73. This is not a topping or bottoming area. The last signal was a buy 3 period(s) ago.
MACD
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 6 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed up 0.010 at 11.600. Volume was 22% below average (neutral) and Bollinger Bands were 23% narrower than normal.
Open High Low Close Volume___
11.725 11.770 11.580 11.600 19,892,160
Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 11.86 11.86 12.08
Volatility: 24 43 41
Volume: 26,325,778 28,321,748 27,672,534
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.
Summary
UNTD ST OIL FUND is currently 4.0% below 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 volume flowing into and out of USO at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on USO and have had this outlook for the last 21 periods.
Read it from Livetradingnews.com – photo as posted there.
