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UKOIL's Slippery Slope Heads Towards $60 Before New ATH of $500+Based on analysis of UKOIL's all-time chart from year 18xx, I believe it to be in a massive Flat correction. With Wave A of the Flat stretching down from $145 to $16, this gives implication that Wave B is likely to move up to the range of $331-$557, likely before the year 2030 arrives. RSI divergence on the monthly chart should also be present during the anticipated run to an ATH. If so, this will confirm a very deep and sharp move to follow.
TVC:UKOIL
by DigitalSurfTrading
WTI - ARCH TO TRIANGLE BULLISHWTI - Is forming a good-looking triangle pattern with a complete range June 10-12, if completed we are looking for a HKEX:10 upwards movement till May 24-26 and a HKEX:4 correction to HKEX:82 levels before the conclusion of the figure. This strictly technical analysis requires some push and there is only one player that can possibly play that card and this is OPEC+. We are currently standing around the previous levels when OPEC+ held a meeting over the weekend and we witnessed a HKEX:5 opening gap on the 3rd of April. Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.
NYMEX:CL1!Long
by legacyFXofficial
USOIL - large downside likely due to increase in retail longsUSOIL has been very volatile in the past 2 weeks due to news surrounding further cuts in oil production by OPEC nations. However there has been a large sudden increase in retail long positions and this likely means we see further downside before any resumption of upside. There is a lot of liquidity to be grabbed around the HKEX:69 - HKEX:70 level (H12 OB). There is also a small probability that new lows could be made given the big imbalance in liquidity.
TVC:USOIL
by SeleCTCapital
1
Crude oil extends rally to test 200 MAIn response to a weaker headline US inflation print of 5%, energy and metal prices rose as the dollar dropped. While gold and silver have since come off their earlier highs, copper has managed to push higher. But it is crude oil that is catching the attention with both contracts up more than 2% each. Why are oil prices rising? Well, the biggest reason is from the supply side of the equation, as it often is when it come to oil prices. Following the OPEC’s surprise decision last weekend to cut oil production unexpectedly by nearly 1.7 million barrels per day, this has so far had the intended impact in keeping oil prices supported. After a week-long consolidation near the HKEX:80 level, oil prices have started move higher this week, with WTI climbing above HKEX:83 today. Crude oil has also been supported in part because of the ongoing weakness in US dollar, optimism about Chinese pent-up demand, and the recent upsurge in other commodity prices like gold and silver. The weaker US CPI print has raised doubts over whether the Fed will now hike rates at all next month, after a 25bp hike was priced in with a 75% probability for the May 3 FOMC meeting. Now, that probability has fallen to around 66%, suggesting investors who are feeling that the Fed is near the end of the hiking cycle will feel even more comfortable now. Falling interest rate expectations is reducing recession concerns and helping to support buck-denominated asset prices at the same time. Improving Eurozone economy Crude oil is also finding support because of an improving European economy. While we haven’t had much European data this week, the closely watched Sentix Investor Confidence, which came out on Tuesday, improved more than expected to -8.7 from -11.1, reflecting the recent improvement in Eurozone data. Indeed, last week, we saw German industrial production jumped 2.0% month-over-month in February, easily beating the 0.1% increase forecast and adds to the 3.7% gain in January. In addition, we saw German factory orders surged 4.8% MoM, while the eurozone composite PMI rose to a 10-month high. As result of the improvement in data, Germany is now expected to avoid a recession. Indeed, a couple of German economic institutes now think the Eurozone’s largest economy will grow this year. The German economic recovery has been supported by the reopening of China and strong activity in the automotive sector. Indeed, we saw German exports surge higher in February while imports also rose. More significantly, the German trade surplus has been noticeably higher at the start of this year compared to Q4. The improving German economy and receding concerns over an energy crisis is why the German DAX index has been able to outperform its Wall Street peers so far this year, and why the EUR/USD has been able to get close to the 1.10 handle. But it is not just Germany. A few other Eurozone countries have also been doing relatively well, not least Spain, where the services sector has been going from strength to strength. WTI’s breakaway gap As mentioned in our previous update, WTI was unlikely to fill that big gap it had formed when the OPEC surprised the market with its decision. It had the characteristics of a breakaway gap. After 1 whole week of consolidation around the key HKEX:80 level, WTI never looked like it wanted to close that gap. This gave traders the confidence that they need that the market wants to push higher, and so they have started to bid oil priced higher again. From here, WTI could go to reach $85.00 and eventually even $90.00. In the short-term, I wouldn’t rule out a dip back towards broken resistance range between $81.00 to $81.80ish, given that it is testing its 200-day average. This $81.00 to $81.80 area is now going to be the most important support zone to watch. For as long as the bulls hold their ground here, the path of least resistance would remain to the upside. -- Written by Fawad Razaqzada, Market Analyst Follow Fawad on Twitter @Trader_F_R
FOREXCOM:USOILLong
by FOREXcom
Oil continues to test key resistance after the OPEC surge. Oil continues to hold firm on Wednesday after a strong surge on Tuesday that saw close to two percent added after sellers looked to test the new floor set up by buyers after the stunning gains seen after OPEC's surprise production cuts. Since the news price has sat in a range between $79.65 and HKEX:81 , maybe we would have seen a new test lower to see how firm the gap was. No, buyers made a new push yesterday, breaking out of the mini range, but now continue to be held back at key resistance. Early in the LON session, buyers are trying to push, but resistance remains in play for now. Looking at yesterday's momentum, if we can see it continue, could this be the move that finally clears this level of resistance? We feel that if we do see a break, this could open up buying, and there's a chance we could see the low 90s possibly tested. The drivers behind the rally are firm, but traders will need to keep an eye on the US response if we see oil trading back at certain levels, as this will start to impact their continuing war with inflation. What do you think? Could we see USOUSD trading back at HKEX:83 - HKEX:85 this week or next? Good trading.
EIGHTCAP:USOUSDLong
by Eightcap
Oil Gap - A Game Changer for its PricesGap means a runaway in prices or a confirmation of a clean break away from its downtrend line. (Technical) OPEC-Plus made a surprise announcement to reduce oil production starting May. Unlike OPEC, OPEC-Plus involve many more countries. This signals a synchronise effort to boost crude oil prices. Expect a much higher oil prices to come. (Fundamental) My recent crude oil videos: • Crude Oil Outlook - USD106 as major resistance • Why Crude Oil is Trending Higher Again, Breaking Above US$100 • Correlation - Crude Oil & CPI • Crude oil a leading inflation indicator See its link below. 3 types of crude oil for trading: • Crude Oil Futures 0.01 per barrel = $10.00 Code: CL • E-mini Crude Oil Futures 0.025 per barrel = $12.50 Code QM • Micro WTI Crude Oil 0.01 per barrel = $1.00 Code MCL Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
NYMEX:CL1!Long
by konhow
WTI could head to $85 after OPEC cutsThe OPEC+ decision means nearly 1.7 million barrels of oil per day will be held back from global supply. This should help to keep the WTI supported. • Significant reduction from oil supply should keep downside limited • Demand concerns overstated • We think WTI could reach $85 to $90 WTI crude oil hit a fresh post-OPEC high above $81.80 on Tuesday, before sliding more than $1 from there to close Wednesday's session lower. But at the time of writing on Thursday, it was back in the positive as support at $80 held yet again. The path of least resistance remains to the upside following the big price upsurge on the back of the OPEC’s unexpected decision at the weekend. Our WTI forecast is that it will reach $85 to $90 before any serious signs of weakness emerge. Where does oil go from here? In the short-term, oil prices are going to be driven more by supply concerns than demand. On the supply front, the big production cuts have fuelled speculation oil prices will reach 2022 levels and provide fresh inflationary jolt to world economy. I, for one, think that the impact of the production cuts could send WTI to at least $85-$90 from here, before we potentially see some real weakness in oil prices again. Any short-term weakness in oil prices could prove to be short lived. Weakening US jobs data not impacting WTI much Obviously, a high oil price will hurt demand at a time when household and business finances are overstretched. The thing about oil demand, though, is that it is very price inelastic. So, unless something like Covid happens again, don’t expect to see a material drop in oil prices due to demand weakness. People will not stop driving or travelling by plane because of high oil prices. Therefore, demand is only likely to get hurt moderately by rising oil prices. This means that the weakness in US jobs data we have seen over the past couple of days, which has revived fears of a slowdown in the US economy, is unlikely to hold oil prices back. On Wednesday we saw the employment component of the ISM PMI fall sharply from the previous month’s 54.0 reading but at 51.3 it still remained in the positive territory. On top of this, the ADP Private Payrolls come in at 145K when 210K was expected. On Tuesday, we saw a big 630K drop in US job openings in February. These weaker employment indicators only add to recession concerns. But it is worth remembering that the jobs market still remains quite healthy. Just look at the recent non-farm payrolls reports. What’s more, despite that large drop in job openings, there are still some 1.67 jobs available for each unemployed US citizen. To give you an idea how this compares to the pre-pandemic levels, when the labour market was considered strong, there were about 1.2 jobs available for each unemployed person in the US. All eyes will now be on the US nonfarm payrolls report on Friday, with the ISM services PMI to come later on Wednesday’s session. European data improves further Meanwhile from Europe we have seen some surprisingly strong data this week. German industrial production jumped 2% in February when a small decline was expected. A day earlier, we found out that industrial orders had jumped by 4.8% in February, recovering sharply since November when recession concerns were at the highest. What’s more, Spanish business activity in both the services and manufacturing sectors improved further in March, and once again beat expectations. Spain's services PMI rose to 59.4 in March, reaching its highest level since November 2021. With the Eurozone economy proving to remain more resilient than expected, this should reduce concerns over demand in the short-term. What about the longer-term outlook? While the OPEC+ cuts are expected to tighten the oil market and may well provide further support to prices in the near-term, the longer-term outlook remains uncertain. After all, a side effect of a sustained period of high oil prices will be inflation. This may mean tighter monetary policy will remain in place longer than expected. Even then, it will probably take a proper hard landing of the global economy to cause a severe dent in global oil demand. Thus, the only way for oil prices to come under significant pressure again is from the supply side of the equation. Specifically, if non-OPEC supply increases sharply. This is possible but will take some time for producers outside of the OPEC+ to ramp up their production. If they ramp oil production so significantly than OPEC+ starts to lose market share again, then this will start another supply war between the OPEC+ and non-OPEC countries such as the US and Canada. WTI Technical Analysis Bringing the focus back to the short-term, oil traders are now torn between waiting for a proper dip in order to buy oil or chase the market here so that they don’t miss out on further potential gains. The big gap that was created at the weekend remains largely unfilled. While gaps typically fill, they don’t always. This could be a breakaway gap in oil prices, given the big fundamental impetus that was announced. On the hourly time frame, we can see that WTI has broken above its triangle continuation pattern after support at $80 held on several occasions. This could be the sign the would-be bullish speculators were waiting for. Whether Thursday's breakout from the triangle pattern will hold remains to be seen. Generally speaking, what oil traders will want to see here is some consolidation around or ideally slightly above the $80 level now. This would give traders the confidence that they need that the market wants to push higher. Alternatively, if WTI falls to fill most or all of its weekend gap, then, in that case, traders will want to see the formation of a bullish daily candle before looking for fresh long opportunities. ICYMI, here’s what the OPEC agreed on In case you didn’t read the news, the OPEC+ blindsided the market with a surprise production cut, announced at the weekend. The group agreed to cut nearly 1.7 million barrels of oil per day. The reductions are pledged from next month through year end. Saudi Arabia is again leading the way with 500,000 barrels per day of cuts. Several other Gulf states have joined in with their curbs. Russia, who had already announced a 500k bpd through June, has now extended that through year end. The OPEC+ decision came totally unexpected. Given that nearly 1.7 million barrels of oil per day will be held back from global supply, this should keep prices supported. -- Written by Fawad Razaqzada, Market Analyst Follow Fawad on Twitter @Trader_F_R
FOREXCOM:USOILLong
by FOREXcom
OPEC’s supply cuts pre-empt economic weaknessThe Organisation of Petroleum Exporting Countries and its partners (OPEC+) producers surprised the market with a decision on Sunday 2 April 2023 to lower production limits by more than 1mn barrels per day (bpd) from May through the end of 2023. This decision was announced ahead of the OPEC+ Joint Ministerial Monitoring Committee (JMMC) meeting scheduled on 3 April and was contrary to market expectations that the committee would keep policy unchanged. Over the prior week, OPEC+ ministers were giving public assurances that they would stick to their production targets for the entire year. This cut tells us that OPEC+ is pre-empting weaker demand into the year and was looking to shore up the market. OPEC+ announcement may have caught speculators by surprise It is evident Sunday’s decision caught the market by surprise evident from the commitment of trader’s report which showed net speculative positioning in Brent crude oil futures at -44k contracts were 146% below the 5-year average. Sentiment on the crude oil market had been weak prior to the decision. Demand outlook remains soft amidst weaker economic backdrop OPEC has been markedly dovish on oil demand for some time relative to other forecasters such as the Energy Information Administration (EIA). This cut helps solve the disparity that existed between OPEC and the EIA. OPEC expects oil demand to grow by around 2mn bpd in 2023. A significant portion of this growth (nearly 710,000bpd) is reliant on Chinese oil demand . Given that such a large amount of demand hinges on a single economy poses a risk to the demand outlook as the pace of China’s recovery post re-opening has not been as robust as previously anticipated. At the same time, tightening credit conditions owing to the recent banking crisis is also likely to weigh on growth forecasts in the rest of the developed world. Global Purchasing Managers Indices (PMI) indicators suggest manufacturing activity has contracted since September 2022. Supply outlook will be driven by new OPEC+ cuts Since Russia has been producing less than its notional limit, the reduction on actual production will be less than 1mn bpd. But with Saudi Arabia committing to voluntary reduction of 500,000bpd we would expect the overall decline in OPEC supply to be around 900,000bpd by the beginning of May 2023. Assuming OPEC production holding at the recent 28.9mn bpd for April, our balances would point to an equilibrium in Q2 and a return to a deficit in Q3 and Q4. This deficit is largely a function of OPEC+ cuts as opposed to stronger demand globally. The front end of the Brent crude oil futures curve remains in backwardation with a roll yield of +0.4% OPEC+ producers can also cut without the fear that they will lose significant market share to non-OPEC members. Previously, OPEC+ would be reluctant to let prices rise too high, as it would incentivise a supply response from US producers. However, US producers today appear more focussed on capital discipline and maximizing shareholder returns. The US also has limited capacity to plug the shortfall created by OPEC+ cuts owing to last year’s unprecedented release from strategic US oil reserves (now at a 40-year low). Conclusion In the short term, OPEC production cuts are almost always supportive evident from the recent price reaction Brent crude oil prices have risen (+6.54% ). However, over the medium term, the price response to cuts have been more mixed as they do tend to signal underlying weakness in the supply/demand balance. Either OPEC countries are expecting demand to be significantly weaker or doubt oil production in Russia will decline as sharply as forecasted. So, with speculative positioning at currently low levels alongside further inventory draws expected later in the year, the risks are titled towards the upside for crude oil prices. However, given the uncertainty in the macro environment, we expect the upside in prices to be capped at about US$90 per barrel.
NYMEX:BB1!
by aneekaguptaWTE
Crude Oil Outlook - USD106 as major resistance 02 Apr 23 OPEC+ made a surprise announcement to reduce its production starting May. The direction of the commodities price is always about supply and demand. With the China opening, there will be an increase in the demand for crude. The reduction on its production will likely cause crude to trend much higher. Video explained why crude to break above USD106. 3 types of crude oil for trading: • Crude Oil Futures 0.01 per barrel = $10.00 Code: CL • E-mini Crude Oil Futures 0.025 per barrel = $12.50 Code QM • Micro WTI Crude Oil 0.01 per barrel = $1.00 Code: MCL Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
NYMEX:CL1!Long
by konhow
2
OPEC Output Cut Reignites Inflation SurgesNYMEX: WTI ( NYMEX:CL1! ), RBOB Gasoline ( NYMEX:RB1! ) Over the weekend, eight OPEC producers, led by Saudi Arabia, announced intentions to cut oil production by 1.16 million barrels per day through the end of the year. This adds to Russia’s existing plan to trim 500,000 barrels from February level, bringing the combined voluntary cuts of OPEC+ members in excess of 1.6 million barrels per day. This surprise announcement is a supply shock and pushes oil price to its highest level in a month. On Monday. NYMEX WTI May futures contract opened at $80.1, up 6.1%, while refined products Heating Oil (HO) and Gasoline (RB) went up 2% and 3%, respectively. Oil price hike adds to the risk of global economic slowdown. COMEX Gold is up 1% to $2,002. For a thorough analysis on gold, please read my recent writing: Oil Price Elasticities and Oil Price Fluctuations Crude oil is an inelastic commodity. When oil price goes up, the resulting decrease in demand will be less, in percentage terms. In a 2016 research paper, Fed economists found that the short-run oil supply elasticity is about 0.1 and the oil demand elasticity is about −0.1. They also found that oil supply shocks are the main driving force of oil market movements, accounting for 50 and 40 percent of the volatility of oil prices and oil production, respectively. (Source: “Oil Price Elasticities and Oil Price Fluctuations”, Caldara, Dario, Michele Cavallo, and Matteo Iacoviello (2016), International Finance Discussion Papers 1173.) Let’s illustrate this point mathematically: • Given: Revenue = Sales X Price, assuming sales = demand • When price goes up 6%, sales would change by -0.1 X 6% = -0.6% • New Revenue = (1+0.06) Price X (1-0.006) Sales = 1.05364 (Price X Sales) • The percentage of change in oil revenue is +5.4%. The economic reason behind the OPEC decision: 1) Supply shock pushes oil price up; 2) Higher price and lower production result in higher oil revenue. This explains why the US has difficulty persuading OPEC to increase production. It runs counter to their core economic interest. Investment Strategies in an Inflationary Environment US consumer price index (CPI) rebounded 0.4% and 0.5% in the first two months of 2023. Annual inflation for energy products: Gasoline (-2.0%), Fuel Oil (+9.2%), Electricity (+12.9%) and Piped gas service (+14.3%). Oil price surge raises energy cost globally, from transportation and utility to the cost of most goods and services. This adds to the uncertainly of central bank monetary policy. According to CME FedWatch, futures traders put 44.6% odds of no rate hike in the May FOMC meeting, and a 55.4% chance of raising 25 basis points. This is like flipping a coin. However, there are opportunities on energy futures, if current price trend continues. WTI Crude Oil (CL) Since last year, the Biden Administration released 180 million barrels of crude oil from the Strategic Petroleum Reserve (SPR) to fight record gasoline price and runaway inflation. According to US Energy Information Administration (EIA), crude oil stock in the SPR stood at 371.6 million barrels at the end of January. This is the lowest level since 1984. In a few weeks, the peak summer driving season will be here. This, coupled with the need to replenish the SPR, forms a strong demand basis for the remainder of the year. With demand being inelastic and the OPEC having incentive to cut output further, I could see WTI going back to the $90-100 range. July WTI (CLN3) is currently quoted $80.0 a barrel. Each contract has a notional value of 1,000 barrels. Margin requirement is $5,500 to place one contract. Hypothetically, if July futures goes up to $90, a long position in one July WTI contract would gain $10,000 (=10*1000). Theoretical return would be +81.8% (=10,000/5,500-1), excluding commission. RBOB Gasoline (RB) On April 3rd, American Automobile Association (AAA) reports that national average retail price for regular unleaded gasoline is $3.506 per gallon. This is up 6.7 cents or +1.9% from a week ago, and +11.6 cents or +3.4% from a month ago. Current price is 68.6 cents or 16.4% below year-ago price of $4.192. However, with less supply and more demand on the horizon, I expect gasoline to retest the $4 level soon. July RBOB (RBN3) is quoted $2.6575 a gallon. Each contract has a notional of 42,000 gallons. Minimum margin is $6,500. If futures price goes up to $2.9, a long position would gain $10,185 (=0.2425*42,000). Theoretical return would be +56.7% (=10,185/6,500-1). Heating Oil (HO) Heating oil price peaked during cold winter season in January. While it is a refined product, the cost of crude oil has less impact on heating oil in off-peak season. Therefore, I do not see much upside potential from current price level of $2.6665/gallon. Henry Hub Natural Gas (HH) OPEC’s output cut has no direct impact on natural gas supply. Today, HH futures went down 11.7 cents to $2.099 per 10,000 MMBtu, or -5.23%. In the U.S., about 50% of the electricity is generated from natural gas, with the remainder coming from coal and renewable energy sources. CBOT Corn Futures (ZC) Currently, up to 40% of US corn output is used to produce ethanol, a form of biofuel. Oil price surge would boost the consumption of the lower-cost ethanol, holding everything else equal. I will write a separate paper on Corn futures next month. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
NYMEX:CL1!Long
by JimHuangChicago
1
Oil maintains post OPEC+ gainsAs mentioned in my previous oil update a couple of weeks ago that “the OPEC might have to cut even more production to prevent prices from falling significantly further,” that’s precisely what they did at the weekend, creating a big gap in oil prices. Oil prices eased off their highs slightly, but not by much. At the time of writing, there were approaching the overnight highs again. Where does oil go from here? Breakaway gap While gaps typically fill, they don’t always. This could be a breakaway gap in oil prices. The impact of the production cuts could send WTI to at least $85-$90 from here, before we potentially see some real weakness in oil prices again. Any short-term weakness in oil prices could prove to be bear traps, and thus may well be bought. In case you didn’t read the news, the OPEC+ blindsided the market with a surprise production cut, announced at the weekend. The group agreed to cut nearly 1.7 million barrels of oil per day. The reductions are pledged from next month through year end. Saudi Arabia is again leading the way with 500,000 barrels per day of cuts. Several other Gulf states have joined in with their curbs. Russia, who had already announced a 500k bpd through June, has now extended that through year end. The OPEC+ decision comes totally unexpected. Given that nearly 1.7 million barrels of oil per day will be held back from global supply, this should keep prices supported. In the short-term we well see some further significant gains in WTI, before the focus turns to weaker demand outlook. What about the longer-term outlook? While the OPEC+ cuts are expected to tighten the oil market and may well provide further support to prices in the near-term, the longer-term outlook remains uncertain. After all, a side effect will be a fresh inflationary jolt to the world economy. This in turn may mean even more rate increases than was priced in last week. Ultimately, a high oil price will hurt demand at a time when household and business finances are overstretched. The thing about oil demand, though, is that it is very price inelastic. So, unless something like Covid happens again, don’t expect to see a material drop in oil prices due to demand weakness. People will not stop driving or travelling by plane because of high oil prices. Therefore, demand is only likely to get hurt moderately by rising oil prices. Indeed, oil is a supply-driven market. Thus, the only way for oil prices to come under significant pressure again is if non-OPEC supply increases sharply. This is possible but will take some time for producers outside the OPEC+ to ramp up their production. So, the big risk is that this could start another supply war between the OPEC+ and non-OPEC countries such as the US and Canada.
FOREXCOM:USOIL
by FOREXcom
A Crude Awakening!The surprise production cut announcement from OPEC+ on Sunday caught us off guard! With oil prices surging close to 7%, the question arises: will this trend persist? To put the production cut into perspective, the unexpected 1.16 million barrels per day reduction is a continuation of the cuts announced last October. In total, these cuts will represent roughly 3.7% of global demand. Since it has been some time since we covered oil, let's revisit some of the factors we see affecting oil now. Strategic Petroleum Reserve First, the US Strategic Petroleum Reserve (SPR) is currently at its lowest level since 1983. The remarkable depletion of the reserve to combat energy inflation finally ended in December. How has crude oil performed since then? It has been trading relatively flat, with the recent news pushing crude back to its December peak levels. We view this as a potential positive for crude oil, as the current low SPR levels indicate that supplies cannot be easily smoothed out by artificial market forces to suppress oil prices. Furthermore, the SPR will eventually require a refill at some point, adding buying pressure. Dollar weakness As crude oil is quoted in USD, the dollar's performance greatly influences oil prices. The chart above depicts the dollar (inverted) against crude oil. Over the past 20 years, periods of dollar weakening have been associated with higher oil prices. With the recent dollar decline, we have yet to see a significant response from crude. COT Positioning Another interesting note about oil is the reduction of non-commercial long positions over the past year as oil rallied from the depths of negative prices in 2020. As long positions close, net positioning (blue) has returned to 2016 lows. The current positioning landscape presents opportunities for a renewed surge in Crude Oil if market participants re-establish their longs. Term Structure The term structure of Crude Oil remains significantly in backwardation, indicating possible demand pressures, as measured by the Dec 2023 – Dec 2024 spread as well as the Jun 2023 – Jun 2024 spreads. The news on OPEC production cut resulted in a spike in the steepness of the term structure, further emphasizing the presence of price pressures. Political Gamesmanship Last but not least, as global powerhouses China, Russia, and Saudi Arabia jockey for positions on the world stage, it's undeniable that oil plays a pivotal role in their strategic arsenal. By leveraging their influence over this vital commodity, these nations may attempt to exert pressure on the US, seeking to tip the geopolitical balance in their favor and assert their dominance in the energy market. Looking at the charts, we see crude oil struggling to break lower after completing a descending triangle. The recent gap up has now positioned Crude Oil just above the 200-day moving average and descending triangle. Combined, the stage seems set for oil’s next leg higher as the low SPR levels, dollar weakness, term structure & net positioning act as potential tailwinds to propel Crude Oil higher. We set our stops at the previous support level of 73.15 and take-profit levels at 92. Each Crude Oil Future contract is equal to 1000 barrels of crude oil. Each 0.01 point increment in Crude Oil Futures is equal to 10 USD. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.reuters.com
NYMEX:CL1!Long
by inspirante
16
Crude Oil (WTI): Have You Seen That GAP? 🛢️ With a sudden OPEC decision to cut oil production rate, the market opened with a huge gap up. The price is currently testing a solid horizontal supply cluster. What we know about gaps is the fact that in 80% of the time they tend to be filled. I believe that sellers will push the price from the underlined resistance and initiate a bearish move. Goals will be 78.57 - middle of the gap, 75.75 - gap open. ❤️Please, support my work with like, thank you!❤️
TVC:USOILShort
by VasilyTrader
7
WTI Outlook 3 April 2023Following the surprise news from OPEC+ where the cartel decided to cut production by more than 1 million barrels a day, energy prices gapped strongly to the upside. WTI tested the 82 price level again which was at the 50% fibonacci retracement level. Typically it is believed that price would have to close the gap before continuing with the trend again. Therefore, look for WTI to retrace before trading higher again, and if price breaks above the 82 resistance level, the next key resistance level is at 93.55 Overall significantly choppy price action is anticipated on energy prices in the short term
TVC:USOIL
by JinDao_Tai
CRUDE OIL TO HIT $160!?😳The price of Crude Oil gapped 6% on market open tonight & moved up 460 PIPS😳 What a crazy move! This was caused on the back of Saudi Arabia & OPEC announcing further Oil output cuts of around 1.16 million barrels a day. This is their way of fighting back against the U.S. & punishing them. This'll create immediate price rises in the United States, then also follow into the U.K.📉 I did warn you guys that this PLANNED Oil shortage & price rise will be next pandemic! This is what will force the everyday person to start switching to electric vehicles.
TVC:USOILLong
by BA_Investments
WTI - GAP CORRECTIONThe Biden administration said the surprise oil output cuts announced on Sunday by Saudi Arabia and other OPEC+ countries were not advisable. The west is not excited by the price development and we can expect an answer to keep the black gold in a reasonable range. Mid-70s is working well to reduce inflation and keep the economy running, that's why a logical move is to boost production supply as a corrective measure. Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.
NYMEX:CL1!Short
by legacyFXofficial
1