Daily Crude Oil Analsys

WTI Crude report and intraday plan

WTI Crude intraday trade plan

Dec 7th 2016 Updated at 10:07 pm EST on Dec 6th 2016

For Tuesday Dec 6th I’d written “While the short term trend remains bullish, we ran into that resistance almost exactly at that important resistance range between 51.90~52.30. Minor levels on the bounce towards here are 51.55 & 51.91. Either of these areas could cause a pause in the move up.” We hit the initial level of 51.55 and sold off as predicted to 50.70~50.60 before a low 18 tics above the best support for the day that I’d foreseen at 50.10.

For the upside forecast today, initial resistance is at 50.60~50.70 but above here we aim for 51.05, 51.30 and perhaps as far as high as 5155/58. In the event that we do continue higher look for 51.88~51.91 before that resistance area 5190/5230. A 2-day close above at the very least is required to confirm a breakout, but it is likely to be volatile. This would be a big buy signal longer term. Initial targets are 53.15/53.10, 53.50, 53.85/53.90, 54.10/15.

WTI Crude is likely to dip below 50.70~50.60 to target the best support for today at 50.10~50.00. A bounce from here is very likely but if I was long from here, I’d place some stops about 30 tics wide say at 49.70. If we break lower from here, it converts to an intraday sell signal and targets 49.60~49.50 initially and then 49.15~49.05.

Pivots for Dec 7th, 2016

R3=51.50 | R2=51.15| R1=50.94 <-> S1=50.54 | S2=50.31 | S3=49.96

WTI Crude Daily Chart Analysis


Analysis and API inventory estimate

Dec 7th 2016 Updated at 10:07 pm EST on Dec 6th 2016

Oil prices fell back from 16-month highs on Tuesday, after fresh data showed that OPEC hit another record high in production in November. Brent briefly rose above a key threshold of $55 per barrel on Monday for the first time since the summer of 2015, but retreated on Tuesday to $53 per barrel.

Since the OPEC agreement was announced last week, WTI climbed 19 percent and Brent prices are up 16 percent. “OPEC sentiment continues to support oil markets. Speculative short positions are still at elevated levels and as more traders unwind these positions they could trigger more support for oil prices,” per Hans van Cleef, senior energy economist at ABN Amro. But OPEC’s collective production set a record high in November, rising to 34.19 million barrels per day. That means the group will need to cut 1.69 mb/d from their production levels, not just the 1.2 mb/d in announced cuts last week in Vienna. However, the problem for OPEC is that a lot of the gains came from countries that are exempted under the November deal. Angola, Libya and Nigeria all added output in November from the month before. To offset those gains, OPEC would have to make deeper cuts, but since that was not specified in the agreement, there is little chance that it will happen. The data caused oil prices to fall more than 2 percent on Tuesday. OPEC is set to meet with non-OPEC producers to finalize the technical details of their agreement. Non-OPEC producers have agreed to cut 600,000 barrels per day beginning in January, which will come on top of the 1.2 mb/d cut from OPEC. Russia alone will cut 300,000 barrels per day, although Russian officials have said that they would do so gradually.

U.S. crude-oil stocks are expected to show a decrease in data due Wednesday from the Department of Energy, according to a survey of analysts and traders by The Wall Street Journal. Estimates from 11 analysts and traders surveyed showed that U.S. oil inventories are projected to have decreased by 900,000 barrels, on average, in the week ended Dec. 2. Three analysts expect stockpiles to rise and eight expect them to decline. Forecasts range from a decrease of 2.3 million barrels to an increase of 1.9 million barrels. The closely watched survey from the Energy Information Administration is due at 10:30 a.m. EST Wednesday. Gasoline stockpiles are expected to show an increase of 1.7 million barrels on average, according to analysts. Nine analysts expect them to rise and two analysts expect them to fall. Estimates range from a fall of 1 million barrels to an increase of 4 million barrels.

Stocks of distillates, which include heating oil and diesel, are expected to grow by 1.5 million barrels. Nine analysts expect an increase and two expect a decrease. Forecasts range from a decline of 2 million barrels to an increase of 3.9 million barrels. Refinery use is seen gaining 0.8 percentage point to 90.6% of capacity, based on EIA data. Seven analysts expect an increase, one expects a decrease and three did not report expectations. Forecasts range from a decrease of 0.5 point to an increase of 1.5 point. The American Petroleum Institute, an industry group, said late Tuesday that its own data for the week showed a 2.2- million-barrel decrease in crude supplies, an 800,000-barrel increase in gasoline stocks and a 4.0-million-barrel increase in distillate inventories, according to a market participant.




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