Nov 3rd 2016 Updated at 10:31 pm EDT on Nov 2nd 2016 (What’s happening in the Globex Session)
Crude prices rebounded in Asia on Thursday as investors saw a sharp fall this week on surging U.S. crude stockpiles as overdone and awaited clarity on OPEC moves to trim output.
Crude oil for December delivery on the New York Mercantile Exchange rose almost 1% to $45.85 as I write this report. Earlier today, oil prices fell to the lowest levels of the session during adding to losses after data showed that crude supplies in the U.S. rose by the most in a single week of reporting since at least 1984. The U.S. EIA said in its weekly report that crude oil inventories rose by 14.4 million barrels in the week ended October 28th. Total U.S. crude oil inventories stood at 482.6 million barrels as of last week, which the EIA considered to be “historically high levels for this time of year”. The report also showed that gasoline inventories decreased by 2.2 million barrels, compared to expectations for a decline of 1.1 million barrels. For distillate inventories including diesel, the EIA reported a drop of 1.8 million barrels.
Elsewhere, Brent oil for January delivery on the ICE Futures Exchange in London was last quoted at $47.08. The U.S. dollar index slipped for a third session in a row early on Thursday in overnight trading and was down 0.09 percent on concerns over the outcome of next week’s U.S. presidential election. A weak dollar makes dollar-denominated oil less costly for importing countries. The weaker dollar provided the market with some reprieve even as crude prices fell to five-week lows in the our day session here in the U.S. Concerns over supply disruptions in Nigeria also supported prices as militants in Nigeria’s southern Niger Delta oil hub attacked a pipeline operated by the Nigerian National Petroleum Corporation on Wednesday.
Today’s Analysis & trade plan (Read this section carefully for trade entry/exit suggestions)
Nov 3rd 2016 Updated at 10:31 pm EDT on Nov 2nd 2016
For Tuesday Nov 2nd, I’d written “If we run it below 45.71 on decent volume on the EIA news day, we will head to tag the 10-month trend line support at 45.20~45.10 area and of course follow that up with the Fib .618 retracement at 44.17.”. Well while we bottomed exactly at 44.96 during the intraday session, we have rallied back some led solely by a weaker dollar from overnight trading of the greenback overseas and the uncertainties of the US General Election and a possible nod by the FOMC meeting keeping the market participants guessing about a possible December rate hike.
The analysis for Thursday’s is always a shorter one after the big move followed by the inventory numbers on Wednesday. The outlook appears a bit positive given the dollar’s move down in Asian trading but technically the move up from the close would appear more promising only if we held 45.80~45.90 price range well into and past the European open early tomorrow and into the pit open for Crude which is 9 am US Eastern time. If that price level holds well we could move to 46.10 painstakingly and grind along all day to perhaps as high as 46.60~46.70 and crest at or just below 47.00. If for some unknown reason or by some bullish statement made by some Oil minister from a OPEC nation holds good, we may head higher to 47.35 area.
If we are held below 45.80~45.90, the bear trend will likely prevail for this market yet another day and again painstakingly targeting initial support in the down move into the 45.40 price region followed by 45.00~44.95 almost like the day session today. If we break out lower, I would seek Fib levels I have spoken about earlier slowing down on the skid at perhaps 44.40~44.30 on the way to 44.17 or even 43.98 for Thursday.
Cam Pivots for Nov 3rd, 2016
R3=47.00 | R2=46.31 | R1=45.85 <-> S1=45.08 | S2=44.67 | S3=43.98
Chart (WTI Daily Chart)