West Texas OilShort
WTI Oil Macro Outlook
Updated
West Texas Intermediate Crude Outlook
Technical Analysis:
Still on an uptrend but indicators are showing signs of weakness.
- Bearish Divergence on the Weekly for both RSI & OBV
- Elliot wave count could indicate end of wave 5 and start of an ABC correction
- Break below 67.476-ish area bottom of trend line would indicate further bearish momentum however support on the bottom trend line could indicate a continuation of the uptrend
- Weekly candlestick reversal pattern formed
Key support levels are
- 62.5 - 60
- 54.65 - 53.5
Fundamental Analysis:
- Libya's state-run National Oil Corp open up adding a supply shock to the oil market adding to the bearish price action
- Trade tension affecting crude prices due to the following reasons currency fluctuation (stronger dollar = pressure on crude) and tariff to the energy sector (decreasing demand)
- OPEC could boost oil supply more + Trump (adding to the supply)
- EIA inventory indicate levels reported a below forecast with decrease inventory levels -12.63M (-4.489M forecast) (investing.com/economic-calendar/eia-crude-oil-inventories-75)
Much lower than forecast which would indicate further bullish price action however price traded downwards instead, this would indicate that the information has already been priced into the market.
Summer season also is expected to have increase in demand due to driving seasons thus market has already priced in to such information.
In my opinion, the actions taken by various organization to cool down oil prices would lead to a supply shock where we would see a sharp decline in oil prices over the following months or until trade tension subsides.
Happy Hunting,
Charles Chua
Disclaimer
This information is for educational and informational purposes only. Any information and advice on investments are thoughts and my own opinions only. I am not responsible for any investments you make.
Technical Analysis:
Still on an uptrend but indicators are showing signs of weakness.
- Bearish Divergence on the Weekly for both RSI & OBV
- Elliot wave count could indicate end of wave 5 and start of an ABC correction
- Break below 67.476-ish area bottom of trend line would indicate further bearish momentum however support on the bottom trend line could indicate a continuation of the uptrend
- Weekly candlestick reversal pattern formed
Key support levels are
- 62.5 - 60
- 54.65 - 53.5
Fundamental Analysis:
- Libya's state-run National Oil Corp open up adding a supply shock to the oil market adding to the bearish price action
- Trade tension affecting crude prices due to the following reasons currency fluctuation (stronger dollar = pressure on crude) and tariff to the energy sector (decreasing demand)
- OPEC could boost oil supply more + Trump (adding to the supply)
- EIA inventory indicate levels reported a below forecast with decrease inventory levels -12.63M (-4.489M forecast) (investing.com/economic-calendar/eia-crude-oil-inventories-75)
Much lower than forecast which would indicate further bullish price action however price traded downwards instead, this would indicate that the information has already been priced into the market.
Summer season also is expected to have increase in demand due to driving seasons thus market has already priced in to such information.
In my opinion, the actions taken by various organization to cool down oil prices would lead to a supply shock where we would see a sharp decline in oil prices over the following months or until trade tension subsides.
Happy Hunting,
Charles Chua
Disclaimer
This information is for educational and informational purposes only. Any information and advice on investments are thoughts and my own opinions only. I am not responsible for any investments you make.
Note
continuation of uptrend or break down?
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.