Daily Crude Oil Analsys

Intraday trade plan for CL 12/15/2016

WTI Crude intraday trade plan

Dec 15th 2016 Updated at 10:22 pm EST on Dec 14th 2016  

In the trading report for Wed Dec 14th, I’d written “we may need to see a correction ahead of a true bull trend. We could potentially dip below 52.20~52.10 and I’d consider this a nice buying opportunity at 51.80~51.70. Attempting longs with slightly wider stops (say 51.50~51.40), may be a decent idea into the morning session. In the event that EIA reports a build that is much higher, I’d suspect that we perhaps break below 51.40. This would be indicative of a more negative price action scenario and this will imply a false breakout above the trend line that occurred earlier this week in the Globex session on Sunday. Incidentally this puts bears back in control at least momentarily as we target 50.70~50.60”. Well, we hit our initial targets down to 51.70 and continued lower to the next target of 50.70~5060.

For the upside scenario for today, we hit the 50.70~50.60 target and have bottomed out here and resurfaced some to 50.86. A recovery from here as we take profits is unlikely to last too long with first resistance at 51.55~51.65 being the main challenge for bulls today. I would perhaps try shorts if we hit this price with a nice wide 40 tick stop. If we continue higher past your stop, I would expect 52.25 initially and crest at 52.55~52.60 region.   

We have minor support at yesterday’s low print area i.e. 50.70~50.60 and therefore additional losses should not be a farfetched idea with the first signs of some decent support for today at 49.85~49.75. For the short-term oversold conditions, this would be my best estimate for a LOD print and I would be trying to go long here with fairly wide stops if your trading account can withstand it, perhaps about 50 ticks down to 49.25. Your alternative approach is to wait for a reversal indication of a higher low swing before going long. 

Pivots –> R3=52.92 | R2=52.01| R1=51.46 <-> S1=50.36 | S2=49.81 | S3=48.90

WTI Crude Daily Chart View

CL-Daily-12-15-2016.PNG

News (an Asian Reuters story)

Dec 15th 2016 Updated at 10:22 pm EST on Dec 14th 2016

Oil prices dropped on Thursday as a hike in U.S. interest rates drove money away from commodities and into U.S. bonds and the dollar, but a tighter fuel market looms in 2017 due to planned production cuts led by OPEC and Russia. WTI crude oil futures were trading at $50.87 per barrel at 0235 GMT, down 17 cents from their last settlement. International Brent crude oil futures were down 7 cents at $53.83 a barrel. Those losses came on the back of declines seen late on Wednesday, when crude fell over 3 percent due to a strong dollar. The greenback shot close to 14-year highs against a basket of other currencies as the U.S. Federal Reserve raised rates for the first time in a year.

A stronger dollar, in which oil is traded, can hit crude demand as it makes fuel purchases more expensive for countries using other currencies at home. Beyond the bearish impact from the U.S. interest rate hike, oil prices were also dragged down by rising output from the Organization of the Petroleum Exporting Countries (OPEC).

OPEC pumped 33.87 million barrels per day (bpd) last month, according to figures it collects from secondary sources, up 150,000 bpd from October, OPEC said in a monthly report. That shows the group’s output has continued to rise, adding to a global glut, ahead of the January start of its first supply cut agreement since 2008. That could raise questions about its ability to comply fully with the deal. Data from the U.S. Energy Information Administration (EIA) showed that commercial crude inventories last week declined by 2.56 million barrels to 483.19 million barrels.

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