Daily Crude Oil Analsys

WTI Crude Oil Analysis for Tue 11/29/16

Intraday trade plan for Nov 29th 2016 Updated at 10:48 pm on Nov 28th 2016 EST

For Mon, Nov 28th I’d written – “Like my forecast Friday which was about a full 100-tics higher, for today, if we continued selling we would initially target 45.35~45.25 region… If the bulls show up with a rebel contingent to defend prices in this area we could continue higher to 46.90~47.00 and any gains above here into 47.20~47.30 would make a bargain selling point”.  We shot past that 47.30 estimate to 47.65 and topped it off here and have now sold off to 46.73 as I write this!

For the upside forecast today Crude may just have one more leg up before a steep sell off. Longer term outlook remains negative but holding above 46.70~46.60, as we are currently doing in the Globex session will take us initially to 46.90~47.00 easily and then a retest of stronger resistance at 47.65~47.75, an area of yesterday’s high print. A break above 48.00 will keep the bulls in short-term control to target 48.80~48.85 and from there form an excellent selling opportunity at 48.90~49.00.

While the trend remains bearish below 46.60, we will easily target 46.10~46.00 into initial support. Continuing lower I’d look for 45.70~45.65 and making an entry to the long side on such a slide, too early and a tad bit too risky. If we continue to slide further which could only be triggered by a very bearish API inventory estimate after the close tomorrow I’d be looking for 45.35~45.25 and then at 44.90~44.80. Anything below here risks a re-tag of the 200 DMA at 44.30~44.25. 

Cam Pivots for Nov 29th, 2016

R3=48.04 | R2=47.52 | R1=47.20 <-> S1=46.58 | S2=46.26 | S3=45.74

WTI Crude Daily Chart Analysis


News & Analysis with a focus on trading in Asia early on 29th Nov, 2016

Oil prices dipped on Tuesday on doubts that producer cartel OPEC will be able to hammer out a meaningful output cut during a meeting on Wednesday aimed at reining in a global supply overhang and propping up prices. International Brent crude oil futures were trading at $47.99 per barrel at 0305 GMT, down 25 cents, or 0.5 percent, from their last close. U.S. WTI was down 29 cents, or 0.65 percent, at $46.79 a barrel. OPEC is meeting officially in Vienna on Wednesday to discuss a planned production cut in an effort to curb overproduction that has dogged markets and more than halved prices since 2014. With a high degree of uncertainty going into the last 24 hours before the meeting, oil price volatility is expected to be high.

Members of the Organization of the Petroleum Exporting Countries have been trying for months to strike a deal to reduce output and ease a global glut of crude. In late September, the group announced a tentative plan to implement production cuts. But they left out important details, guaranteeing volatility for oil in the run-up to the group’s Nov. 30 meeting. Arriving in Vienna, Iraq Oil Minister Jabar al-Luaibi said Monday that he was confident OPEC would reach an agreement this week. Iran and Iraq, which have previously said they want to keep increasing output, indicated in a Monday private meeting that they would consider holding production steady, according to a person familiar with the matter. That’s part of what drove prices higher Monday. Per analysts from Again Capital “Iran and Iraq are holding the key to getting a deal done,” he said. “Their rhetoric counts right now.” But there have been few indications that OPEC’s members have found a way around the hurdles that have kept them from reaching an accord, even with a strong push by Saudi Arabia. Russia, which isn’t a member of OPEC, has stopped short of saying it would curtail output. Still, many market participants believe the stakes are too high for OPEC members to fail to reach a deal. Oil prices last month climbed above $50 after the cartel pledged to cut production. Some analysts now fear that U.S. crude could plunge below $40 level if oil ministers leave Vienna empty handed.

One challenge for OPEC is to nail down how much each country will be allowed to produce. Another is enforcing any arrangement when the group has a notoriously poor record of compliance and the fact that some sizeable oil producers, like Nigeria and Libya, are exempt from the negotiations. OPEC’s output has also continued to climb over the past two months, with many countries pumping more oil even as they discussed freezing or curtailing production. In September, OPEC agreed to target production levels that would have translated into a 200,000 to 700,000 barrel-a-day reduction. Tariq Zahir, managing member of Tyche Capital Partners, said the group would now have to agree to cut at least 1 million barrels a day to make a meaningful dent in supply. “I think there’s going to be some kind of a deal done to save face,” Mr. Zahir said. “But you need to have a serious cut.” Even if OPEC strikes a deal, its impact on prices may be short-lived. “We may be seeing prices in the low 40s before we see the high 50s,” said Mark Anderle, director of supply and trading at TAC Energy. Gasoline futures rose 4 cents, or 2.91%, to $1.4127 a gallon. Diesel futures rose 4.28 cents, or 2.91%, to $1.5128 a gallon.


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