USOIL top-down analysisHello traders, this is a complete multiple timeframe analysis of this pair. We see could find significant trading opportunities as per analysis upon price action confirmation we may take this trade. Smash the like button if you find value in this analysis and drop a comment if you have any questions or let me know which pair to cover in my next analysis.
Wticrude
beginning of 2023 will be bullish for oilFrom the previous analysis I analyzed as oil could bottom at 75 dollar.
However it broke my resistant and stayed at 70 dollar point.
Even the oil broke my resistant line. I kept my bullish analysis because it didn't show any major bearish pattern.
I personally confirm that recent bearish move was just a fake one.
I adjusted my bullish target to 90 dollar and I will re-analyze oil again when it reaches to my target.
Double overselling term is showing and sustainable oil demand will push to higher price indeed.
Is WTI Crude Set to ReboundIn this week’s case study, we analyse a long position on Micro WTI Crude Futures (February) with a potential target of $82.30/barrel and a stop loss at $67/barrel, yielding a reward to risk ratio of 1.15.
Last week, we delivered a case study with a short position on WTI Crude Oil futures with entry at $77.80/barrel and exit at $73.65/barrel. This worked as planned with the target price being triggered within two days.
Now with price trading at $74.10/barrel and strong support between $67-$72/barrel, this case study argues that this presents an interesting opportunity to enter into a long position in WTI Crude Oil futures.
Bolstered by demand from China which is expected to recover, a long position in Crude Oil Futures provides us hedge in the medium-long term against limited downside risk.
Replenishment of US Strategic Petroleum Reserve (S PR)
The Biden administration is reported to replenish its S PR between the price range of $67-$72/barrel. WTI Crude is currently trading in that price range which could trigger S PR replenishment.
More than 200 million barrels has been drawn down to supplement the demand for US crude oil amid high international prices. However, it is worth noting that according to the US Department of Energy, there are no active purchase offers yet.
China Easing COVID Curbs
Last week, China announced the most significant relaxation of its COVID curbs since the pandemic first erupted three years ago. Rules covering quarantine times, movement of people, and lockdown as well as testing were eased in the country. Nevertheless, COVID cases in China remain high. Although official numbers have fallen to a monthly low, straining medical infrastructure points to high level of infected cases.
China is the second largest consumer of Crude Oil in the world, although they have largely been buying Russian Crude Oil at a discount, as demand increases, it will likely spill over into purchases of international oil as well impacting prices of Crude Oil.
Fed Rate Decision
All eyes are on the US Federal Reserve’s interest rate decision due on December 14th. According to the CME FedWatch tool, there is a 75% probability of a 50-bps (0.5%) rate hike at this meeting, slowing from the record 75-bps rate hikes announced at previous four meetings.
Over the past two weeks, economic data points to limited impact of Fed rate hikes leading to fears that the Fed may continue with 75-bps rate hike.
Tanker Delays
Over the past week, several tankers carrying Russian crude oil were halted at the Turkish strait due to confusion surrounding the G7’s imposed sanctions on Russian crude tanker insuranc e.
As of Monday, this jam started to be cleared. However according to a Bloomberg report, some 12 tankers had still not submitted the necessary documents confirming insu rance liabilities. As these delays might take more time to resolve, this might positively impact demand for WTI Crude Oil.
EIA Short Term Energy Outlook
The US Energy Information Administration (E IA) released its short-term energy outlook last week in which they stated that refinery utilization for 2023 was expected to remain at a five-year high.
Although this will lead to lower prices for distillate and other petroleum products, it ensures high demand for WTI Crude leading to a strong price support.
Technical Signals from the COT Report
WTI Crude is currently trading at $70.67/barrel, which is right below its S1 support according to the Pivot indicator which stands at $71.48/barrel. The range of $67-72 provides strong support as mentioned before. Both RSI and Stochastic indicators point to oversold which could indicate a recovery in the short term.
In the latest Commitment of Traders (COT) report from December 6th, we can see that money moved out of swap positions to directional positions. Long positions held by managed money increased sharply by 11.9%.
Overall long position OI increased by 4.4%. Still, this was on par with the increase in short position OI which also increased by 4.4%. Short OI saw producer positions increase far more than long OI.
Trade Setup
CME’s NYMEX Micro WTI Crude Futures provide exposure to 100 barrels of WTI crude oil. They have a maintenance margin of $750 at the time of writing and provide a cost-efficient way of getting exposures to the movements in Crude Oil prices.
Long Position on CME NYMEX Micro WTI Crude Futures – February 2023 Contract
Entry: $74.10/barrel
Take Profit Target 1: $85.00/barrel
Take Profit Target 2: $82.30/barrel
Stop Loss: $67.00/barrel
Establishing a long position on Micro WTI Futures (February) with an entry price of $74.10/barrel with a potential take profit target of $82.3 could provide exposure to a recovery in a WTI crude prices. This would yield 109.3% returns or $820.
A stop loss at $67.0/barrel could protect against a further downward move. This is placed at the lower end of the expected range of S PR replenishment which is expected to provide strong support. The stop loss, if triggered, would lead to a loss of $710 or 94.6%, providing a reward risk ratio of 1.15. Alternatively, holding the position until the second target of $85/barrel would yield $1,090 in profit or 145.3%.
CME’s full-size NYMEX WTI futures provide exposure to 1,000 barrels of WTI crude with a maintenance margin of $7,300 at the time of writing and provide improved liquidity in case of larger positions.
MARKET DATA
CME Real-time Market Data help identify trading set-ups and express market views better. 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
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USOil/WTI Short overallhello everyone.. last 2 week we had good bull run for usoil... but as soon it reached 82 the price starts consolidating, like in 4hr tf the price test 82 several times.. however if we look at weekly tf the main resistance is around 84-85.. at this point the price can trick the seller... overall i think its a bear trap (still LH & LL).. the resistance trend line also make more sense at the 84-85 price area. look for a good pullback using high tf for better accuracy... currently the price could go up this week before it pulls back
good luck
WTI: CRUDE OIL TREND OUTLOOKLet's look to Wti.
It moved up in the past weeks. But I think that trend is weakening and downside movement is possible soon.
Because, Crude Oil is reaching to strong level - 83.83!
What should we do in this case?
1. Place sell stop order at 81.52
2. First target is 76.98
3. Second target is 73.16
4. Stop Loss is necessary at 83.50
But if it will continue upward movement? Then, we need place buy stop order also:
1. Open buy stop at 83.65
2. Target is 86.98
3. Stop is 81.01
That's all for today. Let's wait and see what will be happen in next days.
Good luck!
Consumer savings decline, economy slows down, and EIA's forecastSince December 2022, the price of West Texas Intermediate crude oil has been moving choppily between $70 and $83. Currently, one barrel trades near $77.50. We continue waiting on the sidelines for the market picture to clear. However, we are still unconvinced by bullish scenarios for oil, forecasting a return of $100 and above. That is because we already see a significant slowdown in economic activity around the globe and evaporating savings of consumers in the United States, both of which are likely to weigh on the oil demand in the coming months. Therefore, we would not be surprised to see USOIL break below $70 after some time. However, the U.S. administration might put a temporary floor for oil around that level due to its plans to refill Strategic Petroleum Reserves in the lower range of that price tag. As a result, this makes a compelling case for the continuation of choppy price action in oil; interestingly, that coincides with the latest assessment of the EIA.
The U.S. Energy Information Administration (EIA) forecasts that global petroleum production will increase by 1% (1.1 million b/d) in 2023. As for U.S. petroleum production, it sees an increase of 5% (1 million barrels per day). In addition to that, it expects OPEC's output to grow by 0.5% (160 000 barrels per day), and, due to Russia’s invasion of Ukraine and war-related sanctions, the EIA expects Russia’s production to drop by more than 12% (from 10.9 million barrels per day in 2022 to only 9.5 million barrels per day) in 2023. The U.S. Energy Information Administration (EIA) anticipates the West Texas Intermediate (WTI) crude oil price to stay relatively flat through the first half of 2023. After that, it expects the price to decline through the end of 2024. As a result, the agency foresees WTI crude oil to average $77 per barrel in 2023 and $72 per barrel in 2024.
Illustration 1.01
Illustration 1.01 displays the daily chart of USOIL. It also shows 20-day SMA and 50-day SMA. Yellow arrows indicate retracements toward these levels, which acted as corrections of the downtrend. We will pay close attention to the 50-day SMA and whether it will halt the price rise in the future; if it fails (and the price breaks above it), it will bolster the bullish case for oil in the short term.
Technical analysis
Daily time frame = Neutral/Slightly bullish
Weekly time frame = Neutral
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
USOIL WTI H4 This Week Trade SetupUSOIL WTI H4 This Week Trade Setup, Oil Price will be 1st Touch Channel Middle Point than come down and 71-70 area, if Middle point Breakout so oil target channel upper point, after channel middle point to crash down we will buy from 71-70 area, i will update my tg channel. thank you
WTI Bearish flag in PlayMonthly Chart : Prevailing macro sallow bearish channel in play.
Weekly Chart : Breakout of weekly bullish channel in the corrective phase of the market structure.
Daily Chart : Double top intermediate pattern formation within the bearish channel.
4H Chart : Asymmetric expanding mini triangle pattern, with impulse breakout of 1H chart bullish corrective structure.
1H Chart : Almost completed bearish flag, expecting break below 73.50 round number with anticipated zone of interest for tp goal at about
70.00 round number.
WTI Lowered demandWe are finally seeing the afterburn effects of Bidens inflations situation start to implode on itself and so pricing has dropped massively due to lowered rates.
THE WORST IS YET TO COME!
There's a real chance that we may see a dramatic bearish move to below 50 potentially 45 for a brief time as we do not have the foundation or the backing to support the increases occurring.
and with the increase of used cars on the market people are going to start buying again just not for a few more months maybe late summer 23.
Refineries are allocating capital to do maintenance work so that they can make money around that same time.
Either way, you can short this all week and get your money and wait.
Recession is poised to weigh on the oil demand and higher pricesSince our previous idea, USOIL broke above 80$ and halted its rise slightly below the 50-day SMA. After that, it faltered to 79$ handle where it currently trades. Meanwhile, we noticed bullish calls emerging all over the place. However, while we allow for the possibility of a further price increase, we do not think it will be as dramatic as many people forecast. At this point, we are very skeptical about the narrative claiming a retest of 100$ and continuation of the rally beyond this price level.
That is because economic activity shows a significant decline in 2022. Furthermore, as if it was not enough, economic activity is poised to slump even more in 2023, with signs of a recession on the horizon. As a result, we expect the economic slowdown to weigh heavily on the oil demand. It would not surprise us to see the U.S. administration put more pressure on oil producers, prompting them to pump more oil out of the ground, especially if the prices continue to climb higher. In turn, that could offset some price increases and help to balance the market. Therefore, we are cautious and pay close attention to market developments.
Illustration 1.01
Illustration 1.01 shows the daily chart of USOIL and two simple moving averages. The yellow arrow indicates the retracement toward the 50-day SMA, which often coincides with a strong downtrend correction. In this case, the price failed to fully retrace and break above the 50-day SMA, which may hint at signs of exhaustion for the rally. Therefore, we raise our level of cautiousness.
Illustration 1.02
Illustration 1.02 displays the daily chart of USOIL and simple support/resistance levels.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Recession concerns and a stronger USD sends WTI back below $80WTI suffered its worst day in 30 yesterday, with a combination of a stronger US dollar, recession concerns and weaker natural gas prices all playing their part for a bearish session. A bearish outside day formed which markets a double top around $81.20, daily volume was above average (and its highest in 14 days) which adds weigh to the bearish reversal candle. Also note that previously the market has reversed lower around the 100-day EMA, yet here it is trying to turn lower around the 50-day EMA (which itself is below the 100-day EMA). A bearish divergence also formed on RSI ahead of the double top, therefore the bias is for another dip lower.
A break of the September low assumes bearish continuation, and next support resides around 72.50 – 73.40. In light of seeking to ‘remain nimble’, we prefer to stick to intraday timeframes in line with the daily bias.
Commitment of traders (managed funds)
We can see that net-long exposure has been ticking higher on WTI for managed funds, but this is due to shorts being covered and not new longs being initiated in recent weeks. Given the negative sentiment then it’s plausible to suspect some of those bears will now be returning. But if or when we see gross longs increase and gross shorts decrease, we would be more confident in calling a bottom in oil. We’re just not there yet.
Leading Indicators - PPI (PPIACO) vs. Unemployment (UNRATE) I wanted to highlight how the peak (downward move) in the Producer Price Index (PPIACO) typically corresponds with the trough (upward move) in the Unemployment Rate (UNRATE) (inverse correlation), as a period of Recession takes hold on the economy, & the financial markets.
I also wanted to compare the above correlation with cycle tops in WTI Crude Oil (WTISPLC) , & also with respect to the OECD Leading Indicators (USALOLITONOSTSAM) — as this helps to pinpoint some of the historic baseline(s) for predicting the peak &/or trough in the business vs. market (financial) cycles.
Here is the key for the attached chart(s):
Top Chart
Black Line (Unemployment Rate - UNRATE): *Black Vertical Dotted Line* = Recession Timing Trough
Blue Line (Producer Price Index - PPIACO): *Blue Vertical Dotted Line* = Recession Timing Peak
Orange Line (WTI Spot Crude - WTISPLC): *Orange Vertical Dotted Line* = Recession Timing Peak
Red Shaded Areas (Recession): Indicator via @chrism665
Bottom Chart
OECD Leading Indicators (USALOLITONOSTSAM): *Black Dashed Line* = Pre-Recession Indicator Peak
Green Horizontal Dotted Line = Expansion Baseline (100)
Orange Horizontal Dotted Line = Current Reading (98.62)
Red Horizontal Dotted Line = Danger Zone (<97)
Red Shaded Areas (Recession): Indicator via @chrism665
Looking at the larger picture of both charts, you can see that typically in previous periods of Recession you would see this flow of the signals (first to peak/trough, last to peak/trough):
Peak - OECD Leading Indicators (USALOLITONOSTSAM)
Trough - Unemployment Rate (UNRATE)
*Peak - Producer Price Index (PPIACO)*
*Peak - WTI Spot Crude (WTISPLC)*
*Note* - As you can see PPIACO & WTISPLC are very closely correlated as demand peaks out, you then see a shift downward in WTISPLC as this is a signal of the topping of economic growth.
Now let's dive close-up into each time period of recession, as we can see some linkages/similarities in the 1991, 2001, & 2009 recessions vs. the what is (likely) a 23' recession, depending how the economic , markets , & financial data plays out this upcoming year — potentially into 24'.
1991 Recession Timeline
Peak - OECD Leading Indicators (USALOLITONOSTSAM): July 1987
Trough - Unemployment Rate (UNRATE): Mar. 1989
Peak - Producer Price Index (PPIACO): Oct. 1990
Peak - WTI Spot Crude (WTISPLC): Nov. 1990
2001 Recession Timeline
Peak - OECD Leading Indicators (USALOLITONOSTSAM): Jan. 2000
Trough - Unemployment Rate (UNRATE): Apr. 2000
Peak - WTI Spot Crude (WTISPLC): Nov. 2000
Peak - Producer Price Index (PPIACO): Jan. 2001
2009 Recession Timeline
Trough - Unemployment Rate (UNRATE): May 2007
Peak - OECD Leading Indicators (USALOLITONOSTSAM): June 2007
Peak - WTI Spot Crude (WTISPLC): June 2008
Peak - Producer Price Index (PPIACO): July 2008
2023(24) Recession Estimated?
Peak - OECD Leading Indicators (USALOLITONOSTSAM): May 2021
Peak - Producer Price Index (PPIACO): June 2022
Peak - WTI Spot Crude (WTISPLC): June 2022
Trough - Unemployment Rate (UNRATE): Sept. 2022
What do you think about this macro analysis? Have we potentially been in a recession in 22' — or are we moving closer to higher unemployment (UNRATE) in 23' as the macro/market conditions worsen, & the Federal Reserve's tighter monetary conditions (liquidity & credit) take their toll on the economy? Let me know what you think in the comments below! 👇🏼
USOil | New perspective for the week | Follow-up detailThis is a follow-up video to my previous analysis where we made over 1,000 pips in profit (see link below for reference purposes). Crude oil prices witnessed significant gains to close last week's trading session with approximately 8% growth as Moscow said it may cut oil production to offset price caps on Russian crude imposed by the G7 nations and the European Union. In the coming week, the chances of subdued trading activities are very likely and this might not be unconnected to the hangover of the holidays thereby reducing the liquidity in the market. In this video, we took a look at the chart from a technical standpoint where the $80 level will be serving as a major determinant of price movement for the new week.
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Margin trading in the foreign exchange market (including commodity trading, CFDs, stocks etc.) has a high risk and is not suitable for all investors. The content of this speculation (including all data) is organized and published by me for the sole purpose of education and assistance in making independent investment decisions. All information herein is for your reference only and I take no responsibility.
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Past performance is not necessarily indicative of future results.
WTI USOil Technical Analysis and Trade IdeaIn this video, we examine a possible USOil WTI trade idea. The trend, key levels of support and resistance, price action, and a potential trade setup are all discussed. As always, everything explained in the video and this is not intended to be financial advice.