WTI Crude intraday trade plan – Jan 23rd 2017 Updated at 2:08 am EST on Jan 23rd 2017
WTI Crude in a sideways range since the start of December. We moved back above strong resistance at 5265/75 on Friday for a selling opportunity at 5340/50, with stops above 5375. Friday’s trading was a bit better. While telling you about my overnight entry serves little purpose, I will put it out here for your benefit anyway. I went long from the time I was writing this report for you early a.m. on Friday at 52.27 and took profits on 3 contracts at 52.99 while letting the other 2 run not far into 53.13. I lacked commitment to trust my own long story from Friday which’d suggested that the top would be in the 53.50 area. I summed up some confidence to recommend and take shorts during the pit session around 53.50 (I took mine at 53.53) and closed them again, a bit pre-maturely at 53.16. Recognize that these trades were based entirely off the Friday report and my levels.
For the upside forecast today, initial resistance remains at 5340~53.50 and will be instrumental in determining direction. Again, if you are attempting shorts in the region like Friday, place your stops with some breathing room but not too aggressively, say right above 53.70. In the event, you are taken out on these stops in good volume, I’d be reversing course and buying into this rally to target 53.90 initially before marking strong resistance at 54.30~54.40. Again, here is another region for trying shorts with the usual breathing space for stops.
The inability by the bulls to take out initial resistance at 53.40~53.50 will targets 53.00 and then seemingly good support at 52.75~52.65. Although not entirely convinced of my read here today, I am thinking that this could hold the downside but again, attempt longs here with some 20-tick stop maybe at or lower than 52.55. Just like the upside break on volume described in the upside story, break to the downside targets 52.30~52.35 and then 52.10~52.00 before last week’s low in the 51.81~51.72 region. I would try longs again with stops below 51.50. Getting stopped out again on the long is a sell signal targeting 51.20 initially and perhaps as far as 50.80.
Pivots for Jan 23rd, 2017
R3=53.77 | R2=53.45| R1=53.33 <-> S1=52.97 | S2=52.80 | S3=52.59
Crude loses ground waiting on the US drilling story (A Reuters story)
Jan 23rd 2017 Updated at 5:55 am EST on Jan 23rd 2017
Oil prices declined during European morning hours on Monday, as prospects of rising U.S. production weighed on the market. Crude oil for March delivery on the New York Mercantile Exchange shed 66 cents, or around 0.5%, to $52.56 a barrel by 5:58AM ET. Elsewhere, Brent oil for March delivery on the ICE Futures Exchange in London dipped 15 cents, or about 0.3%, to $55.34 a barrel.
Oilfield services provider Baker Hughes said Friday that the number of rigs drilling for oil in the U.S. last week jumped by 29 to 551, the largest weekly increase since a recovery in the rig count began in June and the highest level in around 14 months. The data raised concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand. OPEC and non-OPEC countries have made a strong start to lowering their oil output under the first such pact in more than a decade, energy ministers said on Sunday as producers look to reduce oversupply and support prices.
Ministers said that 1.5 million barrels a day of the roughly 1.8 million in cuts pledged by OPEC and non-OPEC countries have already been taken out of the market. January 1 marked the official start of the deal agreed by OPEC and non-OPEC member countries such as Russia in November last year to reduce output by almost 1.8 million barrels per day to 32.5 million for the next six months. The deal, if carried out as planned, should reduce global supply by about 2%.
Elsewhere on Nymex, gasoline futures for February ticked down 0.2 cents, or 0.2% to $1.563 a gallon, while February heating oil slipped 0.3 cents, or 0.2%, to $1.642 a gallon. Natural gas futures for March delivery rose 2.0 cents, or 0.6%, to $3.231 per million British thermal units.