Daily Crude Oil Analsys · Uncategorized

Crude Oil analysis for Monday Nov 7th

WTI Crude Trade Plan (Read this section carefully for trade entry/exit suggestions)

Nov 7th 2016 Updated at 10:15 pm EDT on Nov 6th 2016

For Friday Nov 4th, I’d written “Inability by market bullish market participants to take out that initial resistance at 45.10 will suggest that we test yesterday’s low again in the 44.40~44.30 region. Unlike today, if we begin selling here with some solid red volume bars you may be reaching 43.80~43.75 area quickly”.  We went as high as 44.84 and then hit our target below at 43.80~43.75. In fact, if you saw my day trading targets, I’d called 43.72 and we conveniently hit that level. From here we went lower but if you were long here with my recommendation of a stop about 35 tics below, you wouldn’t have been stopped out as prices bounced from about 43.57 all the way to 44.80.

I believe we continue to be oversold here but I am not seeing a clear buy signal in Crude Oil in this 3-week bearish move. As I write this and from about the Globex open, there has been a move higher with the equity futures rallying on news that would perhaps be supportive of the Democratic candidate in the US General Elections. If we fail again at the point of initial resistance which resumes its position in the 44.8~44.85 area, we will targets the gap we left behind from the Globex open at around the 44.25~44.20 price region. If we continue our descent further tomorrow fueled more likely by a surging greenback than anything else, we could perhaps see the 43.80~43.75 region again and in good volume to the downside slide as far as 43.40 and from here on good volume relinquish the 43-handle and perhaps even tag 42.95 initially and continue on to 42.65~42.60 area.

On the flip side, a break above that initial resistance at 44.80~44.85 will mean we go straight to 45.60~45.65 without much hesitation. Most times, a rallying equity market will lift commodities too and that is what could happen if we overcome this initial resistance. I would not switch to selling until we took out the 46.10~46.20 price area. There is ample resistance support here and we may turn back down as from here replicating the counter move up after falling on Friday.

Cam Pivots for Nov 7th, 2016

R3=45.48 | R2=44.87 | R1=44.52 <-> S1=43.82 | S2=43.47 | S3=42.88

News & Analysis (with a focus on overseas trading)

Nov 7th 2016 Updated at 10:15 pm EDT on Nov 6th 2016

 Oil prices rose in early Asian trading on Monday, with traders citing opportunistic buying following sharp declines in the previous week on the back of ongoing weak fundamentals.

Brent crude was trading at $45.92 per barrel at 0119 GMT, up 43 cents, or 0.75 percent, from their previous close. WTI crude futures were also up 0.48 cents, or 0.91 percent, at $44.54 a barrel. Traders said that the main price driver had been opportunistic buying following last week’s price falls, which were the steepest since January and their lowest level since August.

Overall market fundamentals remain weak. “Individual country details still remain challenging to agree upon on the OPEC production pull-back arrangement discussed in Algiers las month,” Barclays bank said in a note to its clients. “Iraq boosted production while Saudi Arabia asked for exceptions. Russia is still sitting on the sidelines, and none of the non-OPEC members consulted thus far has expressed any intention of a cut,” it added.

There are also risks that the oil supply overhang, which has dogged markets for the last two years, could continue as OPEC’s defacto leader Saudi Arabia has threatened to increase production again should the upcoming meeting between producers lead to no result. Even if Saudi Arabia does not follow up on that threat, its exports could rise. “Saudi local oil demand is falling, and just maintaining current output could imply higher exports,” Barclays said.

In the US there were also signs of rising future output as the BHI rig counts ticked up 9 to 450 in the week to November 4, the highest level since February.

WTI Crude Weekly Chart Analysis


The Inventory Story & Price history



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s