Crude steady as DoE oil stocks build lower than API estimate
Fawad Razaqzada February 15, 2017 3:56 PM
Crude oil prices have been on a roller-coaster ride to absolutely nowhere in recent weeks. It appears as though the buying and selling pressure in finely balanced. Bullish speculators are encouraged to remain in the game because of the OPEC’s efforts to reduce supply. Bearish traders are encouraged by signs of renewed rise in oil production in the US. Here, rig counts and oil inventories have been rising sharply in recent weeks. Indeed, according to the US Department of Energy, crude stockpiles rose by a further 9.5 million barrels in the week ending February 10. This was higher than the build of 3.7 million barrels expected, but slightly lower than the American Petroleum Institute’s (API) estimate of 9.9 million barrels published last night. As a result, oil prices didn’t move much in response as they were already on the retreat in reaction to the API data. So, the uncertainty continues and ranges will likely dominate the agenda. I still think that oil prices will likely rise further to new 2017 highs in the near-term outlook, than, say, drop by 5 bucks.
Given the lack of volatility in recent weeks, it helps if we don’t focus too much on static noise and instead concentrate on the bigger picture. So, as can be seen on the weekly chart, WTI continues to make higher highs and higher lows and remains somewhat comfortably above the pivotal $50/51 range, which had been resistance in the past. Thus the path of least resistance on the higher time frame is still to the upside and will remain so until the chart says otherwise. Last week’s long-legged doji candle highlights the lack of willingness from the sellers to hold onto their positions. If WTI were to break above the $54.30 resistance level this time, then it may stage a more meaningful rally. After all, the multi-week consolidation has allowed the short-term oscillators to unwind from “overbought” levels through time rather than price, which is technically very bullish.
Source: eSignal and FOREX.com.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.