WTI Crude Oil Trading

Daily trend line ( including daily rsi trend line) broken on

1. fall in equity prices
2. news euro -> dollar strength

On H4, price moved below the MAs. Nothing readable on trend lines. Down looks more likely than up.

Ed: the median line does show downward movement over past several hours.

WTI PARED BACK APPROX 50% OF MARCH'S DECLINE TO CLOSE WEEK HIGHER (+0.5%)

 

1. Oil prices were quite a show on Friday ahead of the nonfarm payrolls data, dropping heavily below key techncial support.
2. WTI fell within a range of $56.49bbls and $54.55bbls, below the horizontal support line of 55.60 meeting support at the Kijun-sen.
3. Currently, WTI is stabilising into the close of the week on the 56 handle, up 0.5% for the week.

WTI was extending its losses after the nonfarm payrolls data, reaching a low of 54.55 before recovering back to the 56 handle.
The nonfarm payrolls data arrived as follows:
20k vs 180k headline - This is the worst since Sept 2017. the prior was 304K and revised to +311K. However, not all is bad in the detail of the report.

1. Two-month net revision +12K
2. Unemployment rate 3.8% vs 3.9% expected
3. Participation rate 63.2% vs 63.2% prior
4. Avg hourly earnings +0.4% vs +0.3% exp
5. Avg hourly earnings 3.4% y/y vs +3.3% exp
6. Private payrolls +25K vs +170K exp
7. Manufacturing +4K vs +12K exp
8. U6 underemployment 7.3% vs 8.1% prior

Dollar's reaction

The Greenback dropped from 97.40s to a low of 97.25 in the DXY and then chopped sideways for the rest of the day between 97.31/43 (Besides the drop, the dollar is still strong following the break-up from the H&S neckline at 96.60/70 area ( At a 10-year high, wage growth for American workers likely to keep accelerating and that is something from the jobs data that is supporting the greenback (as well as dovish ECB/RBA/BoC).
Oil prices were already struggling on the China and US trade data this week on signs of a worsening demand outlook due to concern over global growth slowing down. China recently downgraded domestic GDP from 6.5% to between a range of 6-6.5% - The Australian GDP was also a big disappointment. However, oil price managed to recover a good portion of the losses on Friday, bounding from the lows with a surge to the upside of over a dollar, finishing higher for the week following a third-weekly decline in U.S. oil-drilling rigs pointed to a potential fall in domestic production activity. Baker Hughes reported that the number of active U.S. rigs drilling for oil dropped by nine to 834 this week, following a decline of 10 in the oil-rig count a week earlier - The total active U.S. rig count also edged down by 11 to 1,027, according to Baker Hughes.

WTI levels
The price has proven its fragility at the trend line support est.11th Feb which shall no longer be trusted. That support has been shifted to the lows on Friday located at 54.55 - The Kijun-sen. An additional offer at this juncture will make for a bearish case according to the bearish cloud in development. If the 55.56 lows seen at the start of this month are broken again, bears will look for a run back towards the 50 handle with the confluence of the 23.6% Fibo target at 50.20. Bulls have eyes on a target of the recent tops of 57.17 (78.6% Fibo) ahead of the 57.85/93 double-tops - (However, bulls need to get and hold above the 50% retracement of the March decline at 56.20).

End of week update. The price dropped nearly 200 pips after crossing the current uptrend line (blue). The median line did not breach support, as I draw it, at 55.1 on H4. Price returned close to EMA20. I don't see any clues on the chart for next week other than a moderate weakness which could make down more likely than up.

Here is my latest chart on W.T.I. I think it is a short here with sl above 57.50.

The week opened with current price and median crossing the current downtrend line and EMA20. Price has a clear path to 57+.

Price continued advancing, with the GCLJ9 contract reaching HoD at 57.01.

WTI jumps to fresh weekly tops near $57.50, API data eyed

1. Saudi deepening output cuts, weaker DXY and Venezuelan crisis drive oil higher.
2. All eyes on API crude stockpiles report for fresh trading direction.

The bulls regained poise in the European session and drove WTI (oil futures on NYMEX) to hit fresh weekly tops at 57.45, as Brexit optimism lifted the appetite for the risk assets such as oil. Moreover, increased expectations of tightening oil markets also added to the bullish tone in oil prices, as OPEC’s de facto leader Saudi Arabia looks set to deepen the cartel’s supply cuts.

On Monday, a Saudi Arabian Government official noted that the Kingdom is planning to extend deeper-than-agreed oil cuts into April to below 7 million barrels per day (bpd), while keeping its output “well below” 10 million bpd.

In addition, a broadly weaker US dollar amid risk-on trades and the recent bullish US drilling sector activity report also continues to offer support to the bulls. Further, supply disruption risks, in the wake of the political and economic crisis in OPEC-member Venezuela, remains a key catalyst for the recent upsurge in the barrel of WTI.

Looking ahead, markets eagerly await the weekly US crude supplies report due to be published by the American Petroleum Institute (API) at 2130 GMT for fresh trading impetus.

EIA cuts forecast for 2020 world oil demand growth by 20K bpd
12 March 2019, 19:09

The U.S. Energy Information Administration has recently announced that it cut its forecast for 2020 global oil demand growth by 20,000 barrels per day to 1.46 million bpd. The EIA also cut its forecast for 2019 by 40,000 barrels per day to 1.45 million bpd.

Sold @ 57.25 SL: BE TP: 50.25

The advance continued today, with consolidation around 57.10 after the HoD at 57.55. This high is an advance of ~150 pips from where the median line crossed the downtrend line (red) at ~56.05. The HoD occurred right at the resistance line/channel top that I drew at 57.56 -- also at the first upper band U1 at 57.53.

This week could have a breach of the channel top or a decline below ~56.5x.

There is a new uptrend line (blue) anchored at the low point of the median line at the support line at 55.13. Note that the channel top & bottom were anchored on median line reversals that happened last month. Those lines have not been adjusted to match this week's actions.

WTI: Surprise draw in API crude oil inventory supports buyers near $57.00

1. WTI maintains its stand near $57.00 on early Wednesday.
2. Surprise draw in private inventory report helps the US crude benchmark to remain up.
3. $58.00 continues to be a strong resistance with $54.30 acting as important support.

WTI is taking the bids around $57.00 during early Asian hours on Wednesday. The energy benchmark manages to remain firm as private inventory data shows a surprise draw in weekly stock. Reports of supply cut extension and EIA forecasts entertained traders during Tuesday.

The American Petroleum Institute (API) released details of stockpiles survey for the week ended on March 04. As per the results, crude oil inventories surprisingly registered a draw of -2.58 million barrels compared to a build of 7.29M during last week. Reductions were also reported in gasoline stocks by -5.85M but distillate inventories grew +195K.

As the API reports are considered to be an early signal for the official weekly oil stock change report from Energy Information Administration (EIA), traders responded to the decline in inventories with sustained buying.

Earlier during Tuesday, energy traders maintained their buying bets as the latest news from OPEC members signaled readiness to extend supply-cuts. Though, bulls were softly challenged later as EIA cut its forecasts for global oil demand by 20,000 barrels per day to 1.46 million bpd and 40,000 barrels per day to 1.45 million bpd for the years 2020 and 2019 respectively.

Investors may now await official EIA stockpile report, up for release at 14:30 GMT during today. The report last showed an increase in oil levels by 7.069M and bears the market consensus of 2.861M for the present release.

WTI Technical Analysis

In spite of flashing a fresh high of the week, WTI sweet light crude oil continued to remain beneath $58.00 round-figure, a break of which could help the energy price to rise toward $58.80 and $59.10.

Alternatively, 100-day simple moving average (SMA) level of $54.30 can offer strong support ahead of providing small stops around $55.60.

I'm back getting short oil again. Tiny short position for now. I think 59.00 (ish) is possible so may add to position or just let it ride out. I think will retest 55.50 again before it has a chance for 60.

Anything can happen.

crude stocks will be released today
a better than expected data may send the prices 2 dollars up near term

EIA: Commercial crude oil inventories decreased by 3.9 million barrels from previous week

Below are some key highlights from the weekly oil market report published by the U.S. Energy Information Administration.

1. U.S. crude oil refinery inputs averaged 16.0 million barrels per day during the week ending March 8, 2019.
2. Gasoline production decreased last week, averaging 9.7 million barrels per day.
3. Distillate fuel production decreased last week, averaging 4.9 million barrels per day.
4. U.S. crude oil imports averaged 6.7 million barrels per day last week.
5. U.S. commercial crude oil inventories decreased by 3.9 million barrels from the previous week.

Interesting cross-currents: WTI is up on report of inventory drawdowns, while US stocks are diving on Boeing issues. If the report of US grounding the Max 8 is correct, they cannot fly inside the US, which means Boeing cannot even make ferry flights to deliver new Max 8 & 9 aircraft.

Will the downturn in equities begin to affect WTI?

Last couples of months WTI got driven by

1. US dollar
2. Equity
3. Supply and demand
4. China trade deal

In H2 some extra triggers will be added

1. new perimian pipelines are going to be effective
2. Global slowdown (first signs already there in EU+ China)