WTI Crude intraday trade plan
Jan 27th 2017 Updated at 12:20 am EST on Jan 27th 2017
WTI Crude initially topped 13 ticks from first resistance at 5340/50 & bottomed 4 ticks from good support at 5275/65. However, we then shot higher through 5340/50 to the next target of 5388/90, topping 16 ticks above.
My trades yesterday were lackluster. I had one pre-market trade for about 22 ticks and only one in the regular hours for 6 ticks. I struggled trading the 30-Year Treasury Bond as well after making over $ 560 in gains and giving it all back before end of day. I just wasn’t into it yesterday and those who were in the screen share with me perhaps saw the lack in commitment from my trades or recommendations. I was biased short to begin and that did not help although I was happy to not be short yesterday.
While the Energy Information Administration (EIA) reported a 2.8-million-barrel increase, a report by Bernstein Energy is showing that global oil inventories have fallen by 24 million barrels to 5.7 billion barrels in the fourth quarter of last year from the previous quarter or 60 days of global oil consumption. It is obvious that we are seeing rising global oil demand against a backdrop of record compliance to OPEC production cuts. With the Dow breaking 20000 after an extreme period of sideways movement, the odds are high that both the stock market and demand expectations for oil will move substantially higher. While we have not yet seen $60.00 on WTI because of a strong dollar and a seasonal drop in U.S. refining runs, we are still on track to target that lofty level and longer term even higher. The decline in global oil inventories, as well as an upside breakout in the stock market, gives me more confidence repeating the point that crude oil prices have probably seen their low for this year. While black swan events can always change that outlook, from what I can see on the rising demand and shirking supply picture, this market should move higher.
For the upside forecast today, a break above 54.06 targets first resistance at 54.30/40. We should struggle here as we become overbought short term but a break above 5460 signals further gains towards 54.90/55.00 & perhaps as far as 55.20 in to next week.
WTI Crude first support at 53.55/50 must hold the downside if we are to build on the very slow gains from last week. However further losses meet the last line of defense for bulls at 53.20/15. Longs need stops below 5295. Failure here is a short term sell signal targeting 52.70/65.
Pivots for Jan 27th, 2017
R3=54.95 | R2=54.42| R1=54.11 <-> S1=53.49 | S2=53.18 | S3=52.65
WTI Daily Chart
Crude edges higher in Asia in thin trade as Lunar New Year approaches
Jan 27th 2017 Updated at 12:39 am EST on Jan 27th 2017
Crude prices were quoted flat to higher in Asia on Friday with trade thin as China starts week-long Lunar New Year holidays and other markets shut as well.
Global benchmark Brent crude was quoted flat at $56.24 a barrel on London’s Intercontinental Exchange, while U.S. crude on the New York Mercantile Exchange rose 0.15% to $53.86 a barrel.
At the end of the week, oilfield services firm Baker Hughes will give its estimates of the number of rigs drilling for oil and gas in the U.S. Data released last week showed U.S. drillers added 29 rigs, the most in almost four years by the end of the previous week, taking the total count to 551, the most since November 2015. U.S. oil production has risen by more than 6 percent since mid-2016, though it remains 7 percent below the 2015 peak, and is back to levels of late 2014 when oil started a sharp drop from above $100 a barrel.
The higher production is spurred by price gains since the launch this year of a coordinated six-month global deal to curb crude oil supplies to the market by nearly 1.8 million barrels per day by OPEC and key non-OPEC nations led by Russia. 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.
Overnight, crude prices staged a rally in the U.S. on Thursday to settle at sharply higher as investors took note of a rally in share markets this week with the Dow crossing 20,000 that aided sentiment.
Demand hopes were lifted by a flurry of executive actions on immigration and regulations that affect business by President Donald Trump helped lift the Dow Jones index above 20,000 on Wednesday, including clearing the way for TransCanada to build the Keystone XL pipeline and for Energy Transfer Partners to build the final portion of the Dakota Access pipeline.