Daily Crude Oil Analsys

Trade plan for Friday 12/16/2016

Dec 16th 2016 Updated at 10:12 pm EST on Dec 15th 2016  

In the trading report for Wed Dec 15th, I’d written “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”. Well, we hit 51.55 and headed lower as expected to bottom about 10 ticks above the support for the day 49.85~49.75.

For the upside scenario for today, bounced just 10 ticks above the best support for the day at 4985/75 and the best chance of a LOD reading. As I write we have topped 35 ticks from the close to 5125. We should struggle at initial resistance of 51.55~51.65 and could turn lower again towards strong support which is way down there and yesterday’s low print at 49.90~49.80. Above 51.55~51.65 however is more positive and targets 5220/30, perhaps as far as resistance at 5270/80. Try shorts with stops above 5310. 

For the downside, we have minor support at 51.00~50.90. Below 50.60 risks a retest of strong support at 49.90~49.80, I would be trying longs here with 30 ticks stops say around 49.50. If we break lower however, we will convert to a sell signal targeting 49.20 ~ 4890~49.80, and perhaps as far low as 48.45~48.35.

Pivots for Dec 16th, 2016

R3=52.62 | R2=51.90| R1=51.48 <-> S1=50.64 | S2=50.22 | S3=49.50

WTI Crude Daily Chart View

cl-daily-12-16-2016

News – Dec 16th 2016 Updated at 10:12 pm EST on Dec 15th 2016 

Oil prices edged up on Friday after market sources said Kuwait had told customers it was cutting supplies by more than initially expected from January as part of a coordinated effort by oil producers to drain a global glut. International Brent crude oil futures were trading at $54.22 per barrel at 0114 GMT, up 20 cents, or 0.37 percent from their last settlement. WTI crude futures were up 24 cents, or 0.47 percent, at $51.14 per barrel.

The slightly higher prices came after Kuwait, a member of the Organization of the Petroleum Exporting Countries (OPEC), notified customers that it would cut supplies from January as part of an effort by OPEC and other producers led by Russia to cut production by almost 1.8 million barrels per day (bpd) in order to reduce a fuel supply overhang that has dogged markets for over two years. Kuwait Petroleum Corporation (KPC) already said on Tuesday that it had officially notified its customers of a cut in their contractual crude oil supplies for January, in line with a deal with OPEC to reduce production. Traders said that market prices rose as KPC appeared to be cutting supplies more than initially expected. “Prices recovered as news emerged that Kuwait was said to be making bigger production cuts to U.S. and European customers,” ANZ bank said on Friday. Most exporters have a so-called operational tolerance under which they can reduce or increase their contracted exports to clients with little notice. Market sources said that KPC had informed clients that it was cutting supplies beyond the operational tolerance.

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