WTI Crude intraday trade plan
Feb 9th 2017 Updated at 1:23 am EST on Feb 9th 2017
WTI Crude trading for yesterday, I’d written: tested that good support at 51.30~51.20 for profit taking by traders. Ahead of the inventory news, we remain oversold short-term and therefore a nice little sympathy bounce is in order.. We have held this support at 51.30~51.20 in the overnight session and likely that we target 51.75~51.80, and run this up perhaps as far as initial resistance at 52.00~52.10. On a very bullish EIA report gains are likely to be limited and it is my read that this could perhaps mark a HOD print. If bulls show up for the run up, I’d look for a very painstaking grind to 52.25~52.30 and if we reach 52.40~52.50 use this as an initial entry down with wide stops.
My own personal trading struggled yesterday. I was expecting the 13+ Mill Barrel build report to have an effect and continue with the oversold but market makers elect to look at the measly gasoline demand numbers and somehow foresee demand for crude to be growing. My trades resulted in some nice gains initially but at the end of the day I was down to giving up on earlier gains and almost closing flat. I still expect Crude to give up some ground after the initial upbeat sentiment from the gasoline demand dies down.
A break above 53.00 is likely given the gasoline demand sentiment that still hovers. It will place the bulls back in control targeting 53.15~53.20 initially and then perhaps as high as 53.50~53.60 on the continued short-squeeze.
For the downside and continuing yesterday’s story, WTI Crude initially topped exactly at resistance at 52.10 in the initial drop to bottom 20 ticks above support at 5130. Yesterday we did see price above 52.50 for that selling opportunity. We topped at 5267. For today, and staying below 52.40 keeps the pressure to the downside revisiting initial support in the range of 52.00~51.90. Losing ground below here will have again good support at the 51.30~51.20 region for profit taking on shorts again. If we break down from here (and anything is possible with Crude) falling below 51.20 converts to a sell signal again targeting the January low at 50.90~50.70 initially and then, 50.50 and likely very strong support at 50.30~50.20 for an excellent buying opportunity with stops below 49.80. The downside picture however unlikely for today.
Pivots for Feb 9th, 2017
R3=53.50 | R2=53.06| R1=52.73 <-> S1=52.09 | S2=51.77 | S3=51.27
WTI Daily Chart
Crude Oil prices get a lift from bullish gasoline demand: (a WSJ story)
Feb 9th 2017 Updated at 1:50 am EST on Feb 9th 2017
Crude futures rose higher in Asia thanks to better-than-expected gasoline demand in the U.S., but strong growth in crude inventories will likely keep gains limited. On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $52.49 a barrel at 0137 GMT, up $0.15 in the Globex electronic session. April Brent crude on London’s ICE Futures exchange rose $0.15 to $ 55.27 a barrel. A decline in oil prices reversed overnight after the Energy Information Administration data showed gasoline inventories in the U.S. fell by 0.9 million barrels in the most recent week, upending an expectation of a growth.
“The fall in gasoline stocks eased concerns amongst traders that had been growing over recent weeks,” said ANZ Research. According to Platts Analytics, the figure shows that gasoline implied demand rebounded last week, up 631,000 barrels a day to 8.941 million barrels a day. Crude inventories, however, was more bearish. The data showed that while the latest growth in U.S. crude inventories came below market expectations, it still expanded by 13.8 million barrels or up 3.8% on a yearly basis. “Crude imports have risen sharply over the last two weeks, and this coupled with recovering U.S. production contributed to the build,” said Societe Generale in a note. U.S. crude imports rose by 1.1 million barrels a day from the previous week. Over the past four weeks, imports averaged about 8.5 million barrels a day, 10% above the same four-week period a year ago, the agency said.
The latest EIA data also showed U.S. crude production increased by 63,000 barrels a day last week to 8.98 million barrels. The uptrend in U.S. crude production is one of the most pressing threats to a multi-country effort to reduce global supply. The Organization of the Petroleum Exporting Countries and 11 other heavyweight producers, such as Russia, late last year pledged to trim down production by 1.8 million barrels a day to support prices.
To be sure, global oil supply could still shrink and possibly move into a deficit later this year despite an increase from the U.S.–if the non-U.S. producers adhere to their production cut-back plan, said Grace Liu, the head of research at brokerage firm Guotai Junan.
The EIA predicts U.S. production will likely grow by 100,000 barrels a day this year from 2016 and another 500,000 barrels a day by 2018.
“Longer-term, slowing fuels consumption growth in emerging markets, growth in U.S. shale and Saudi Arabia’s substantial spare capacity will weigh on the price recovery,” said BMI Research.
Nymex reformulated gasoline blend-stock for March–the benchmark gasoline contract–rose 27 points to $1.5554 a gallon, while March diesel traded at $1.6406, 46 points higher.
ICE gasoil for March changed hands at $495.00 a metric ton, up $0.75 from Wednesday’s settlement.