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OIL 5th JUNE 2022The Organization of the Petroleum Exporting Countries and its allies (OPEC), agreed on Thursday to increase output by 648,000 barrels per day (bpd) per month in July and August instead of the previously agreed 432,000 bpd. OPEC decision to increase production targets slightly more than planned. As a result of that expectation, it will have little effect on tight global supply and by increasing demand as China loosens Covid restrictions. From the existing fundamental trend, the oil price tends to be bullish, it is possible that the price will breakout the resistance area. However, market participants still think the price of oil is too high, this can make the price rebound to the resistance area, and make the price will correct down. OIL 26th MAY 2022
TVC:USOIL
by DNP-FX
USOIL 26th MAY 2022The United States government said US crude stockpiles fell by one million barrels last week, with gasoline inventories also falling slightly. The oil and gas commodity did not budge after volatile trade as fears of tight supply offset concerns over a possible recession and China's Covid-19 restrictions. World oil prices turned negative after US Energy Secretary Jennifer Granholm said President Joe Biden had not ruled out using export restrictions to reduce soaring domestic fuel prices. This makes world oil prices tend to be sideways , this is my USOIL trading plan.
TVC:USOIL
by DNP-FX
6
WTI Spikes On Large Draw In Gasoline InventoriesThe American Petroleum Institute (API) reported a small build this week for crude oil of 567,000 barrels. The draw comes even as the Department of Energy released 6 million barrels from the Strategic Petroleum Reserves in Week Ending May 20. U.S. crude inventories have shed some 75 million barrels since the start of 2021 and about 18 million barrels since the start of 2020, according to API data. In the week prior, the API reported a draw in crude oil inventories of 2.445 million barrels after analysts had predicted a build of 1.533 million barrels. Oil prices had a modicum of calm on Tuesday, with WTI trading flat with 0% movement from Monday at $110.30 per barrel on the day at 11:21 a.m. ET—down roughly $4.50 per barrel on the week. Brent crude was trading up 0.20% on the day at $113.70—and down nearly $1 per barrel on the week, with the spread between the two benchmarks now completely evaporated U.S. crude oil production rose to 11.9 million bpd in the week ending May 13. Crude production in the United States is down 1.2 million barrels per day from pre-pandemic times. This week, the API reported a large draw in gasoline inventories of 4.223 million barrels for the week ending May 20—on top of the previous week's 5.102-million-barrel draw. Distillate stocks also saw a draw in inventory, of 949,000 barrels for the week compared to last week's 1.075-million-barrel increase. Cushing saw a 731,000-barrel draw this week. Cushing inventories crashed to 25.839 million barrels in the week prior, as of May 13, according to EIA data—down from 59.2 million barrels at the start of 2021, and down from 37.3 million barrels at the end of 2021.
OANDA:BCOUSDShort
by DaveBrascoFX
Consolidation in the Oil Market- Do Not Get Too ComfortableIn early March, when Russia invaded Ukraine, the oil price soared to the highest levels since 2008. While the energy commodity did not reach a new record high, it came close. Nearby ICE Brent futures reached $139.13 per barrel, only $8.37 below the 2008 record peak. The NYMEX WTI futures moved to $130.50 per barrel, $16.77 below the 2008 high. $100 has become a pivot point Product prices and crack spreads have soared- Consumers require products Russia and OPEC have little interest in helping the US and Europe SPR releases are symbolic- The selling will require future replacement Crude oil is building cause for a move to a new all-time high Meanwhile, the 2008 peak in the oil market did not contain gasoline and distillate prices, which have soared to new all-time highs in 2022. Crude oil is the primary input in oil products, as refineries tend to process WTI into gasoline and Brent into distillates. The rise in product prices is a warning sign that crude oil demand remains robust and higher prices are on the horizon. Crude oil has corrected from the March high, but the medium-term trend since the April 2020 low remains higher, and products are screaming that new all-time highs are on the horizon. Markets reflect the economic and geopolitical landscapes. The highest inflation in over four decades, US energy policy, and the war in Europe are factors that will likely draw new upside chart points for crude oil over the coming months. $100 has become a pivot point The $100 per barrel level in NYMEX crude is a critical psychological level that has become a base price or pivot point for the energy commodity since February 2022. The above chart highlights that after NYMEX crude oil spiked to $130.50 per barrel in early March, the price corrected and settled into a trading range around the $100 per barrel level. The nearby futures contract probed below the pivot point in March, April, and May, but each attempt to correct attracted buying and pushed the price back above the psychological price level. On Friday, May 20, the July futures contract settled at the $110.00 per barrel level, with the trajectory favoring the upside. Product prices and crack spreads have soared- Consumers require products Crude oil is the input in oil products. Consumers are either direct or indirect buyers of gasoline and distillate fuels. The price action in the products suggests robust energy demand and supports higher crude oil prices. Crack spreads reflect the refining margin for processing petroleum into gasoline and distillates. On a quarterly basis, gasoline crack spreads rose to a new all-time high of $58.67 on May 16 and was above the $47.90 level on May 20. The heating oil crack spread reached $74.05 per barrel on May 3 and was at the $43.80 per barrel level on May 20, above the 2012 previous all-time high. Heating oil is a proxy for other distillates, including jet and diesel fuels. The elevated crack spreads tell us that the demand for oil products remains high even with crude oil above $110 per barrel. Demand supports higher oil prices in late May 2022. Russia and OPEC have little interest in helping the US and Europe After years of suffering from US shale production that pushed US output to a record 13.1 million barrels per day in March 2020, US energy policy did an about-face in January 2021. Addressing climate change under the Biden administration handed the petroleum market’s pricing power back to the international oil cartel and Russia. Since 2016, Russian influence on OPEC policy has dramatically increased. Saudi Arabia and Russia now control the energy commodity as the US has taken a backseat because of stricter regulations, fewer pipelines and leases, and less production incentives. Moreover, encouraging alternative and renewable fuel production and consumption has come at the cost of inhibiting traditional energy output. Meanwhile, oil and oil products continue to power the world, and the US, making the US and European allies more dependent on foreign sources. Warren Buffett once said that you find out who is swimming naked when the tide goes out. It is low tide in the oil market, as Saudi Aramco replaced Apple (AAPL) as the world’s most valuable company last week. Balancing Saudi Arabia’s budget requires crude oil at the $80 per barrel level. With Brent crude oil north of $110 per barrel, the world’s leading producer is experiencing a profit bonanza. While the US, Europe, and other allies have slapped Russia with sanctions after it invaded Ukraine, China, and India, the world’s most populous countries continue to purchase oil from Moscow, allowing revenues to flow to the aggressive Putin regime. The bottom line is Russia and Saudi Arabia is not predisposed to do any favors to the US, Europe, and other “unfriendly” countries in the current environment. The Biden administration has asked Saudi Arabia to increase its output, but the pleas have fallen on deaf ears in the Kingdom. SPR releases are symbolic- The selling will require future replacement President Biden has authorized crude oil sales from the US strategic stockpile. The latest release is for a record one million barrels per day. The US Strategic Petroleum Reserve is an emergency supply for times when shortages develop and for military purposes. Each barrel sold needs to eventually flow back into the caves that hold the petroleum. The more the US government sells, the more it will have to buy in the future. Meanwhile, SPR releases have historically done little to push oil prices lower. The oil price remains north of $110 per barrel despite the current sales. SPR shales may have symbolic political appeal, but they have little utility in the current environment. Selling crude oil from the SPR is not the answer to the current high energy prices; increasing drilling and production is the only effective means of pushing traditional energy prices lower. Meanwhile, there are no plans to ramp up US production to take the leadership baton from Saudi Arabia and Russia. On May 13, the Biden administration canceled an Alaskan oil and gas lease sale. Aside from ceding control of oil and gas prices to Moscow and Riyadh, the higher prices are potent fuel for US inflationary pressures that continue to rise. While the Us central bank has tools to deal with demand-side macroeconomic problems, the rising oil and gas prices are a supply-side factor that requires a solution, not in the central banker’s toolbox. However, the Washington DC administration has no plans or desire to address energy market dynamics by increasing US production. Inflation and OPEC+’s dominance will continue to rise. Moreover, the high oil prices are funding Russian aggression in Eastern Europe; the rising petroleum revenues support the war effort and the potential for further expansion. Crude oil is building cause for a move to a new all-time high The current targets for WTI and Brent futures are the early March $130.50 and $139.13 highs. Above those levels, the all-time 2008 peaks at $147.27, and $147.50 are critical technical resistance levels. Crude oil is consolidating and digesting the move to the highest prices since 2008. Bull markets rarely move in straight lines, and correction and consolidation periods are constructive and healthy. Crude oil is building cause for another bullish leg that could take prices to the $150 level or higher over the coming months. The Saudis and Russians will sit back and cheer as the price rises, Aramco’s market cap, and profits rise, and Russia fills its coffers with the spoils of its economic war with the US and Europe. Given the rise in refining margins, consumers are already paying record prices for oil products. We may be looking down at $5+ gasoline over the coming months and years. We remain bullish on crude oil, but the road to higher prices could be very volatile. Buying dips in crude oil and oil-related equities could be the optimal approach to the market for the rest of 2022 and beyond. Don’t get too comfortable with the $100 pivot price for crude oil. -- Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
NYMEX:CL1!Long
by Andy_Hecht
1
USOUSD Oil, continuation higher watch.Good morning/good afternoon TradingView community. Today's video idea is focused on oil as we saw a solid reversal yesterday sellers did their best to get a new leg lower going. Buyers not only stopped the run but put in a solid reversal bar that finished above the 50% point of the previous lower bar. This action has us thinking, could this be the start of a new trend continuation? We are watching to see if buyers can break yesterday's high. A break could be the starting point of confirmation of this idea. The MA and CCi both support further buying, but we really want to see yesterday's high beaten to show that buyers retain momentum. Please check out our video for more detail on our trade idea. Good trading. We hope everyone has a great weekend.
EIGHTCAP:USOUSDLong
by Eightcap