25 Oct Daily take on WTI crude oil

Daily take on WTI crude oil

This is my dai­ly take on the WTI crude oil mar­ket. I will keep these post short and to the point. The pur­pose of these posts is for me to set up my bias for the day and look for sig­nals to start tak­ing positions.

Sources will be list­ed at the end.

DISCLAIMER

Click here for my dis­claimer. It basi­cal­ly says that I am on my path to becom­ing a trad­er and these are just my opin­ions on how to approach learn­ing to trade. Feel free to check it out and com­ment on it.

Here it goes…

WTI has pos­i­tive and neg­a­tive cor­re­la­tions to oth­er finan­cial instru­ments and I will list these here to show the rea­son for my bias. I have three cat­e­gories: Down­ward, neu­tral and upward pres­sure. Down­ward pres­sure means that the items list­ed have a neg­a­tive effect on WTI crude oil and is cause for a short-bias and vice versa.

Related Financial Markets

The pos­i­tive cor­re­lat­ed finan­cial mar­kets look a lit­tle bear­ish or inde­ci­sive. It is almost noon in Asia so we’ll have to see how this devel­ops lat­er in the day. 

The neg­a­tive cor­re­lat­ed ones look neu­tral at this point looks like there’s going to be down­ward pressure. 

News

WASHINGTON (Reuters) — Draft leg­is­la­tion respond­ing to U.S. Pres­i­dent Don­ald Trump’s refusal to cer­ti­fy the Iran nuclear deal would set tough new terms for the pact, includ­ing restor­ing sanc­tions if Iran tests a bal­lis­tic mis­sile able to car­ry a war­head or bars nuclear inspec­tors from any sites.

Cork­er has met with Sen­ate Demo­c­ra­t­ic col­leagues, at least some of whom would have to back the leg­is­la­tion for it to pass. They have insist­ed that Wash­ing­ton work with Euro­pean allies who co-signed the deal before mak­ing any changes.

Britain, France, Ger­many and the Euro­pean Union, which also signed the nuclear accord — as did Rus­sia and Chi­na — warned that Trump’s plan could cause a split with Wash­ing­ton and risked U.S. cred­i­bil­i­ty abroad.

Cork­er, chair­man of the Sen­ate For­eign Rela­tions Com­mit­tee, told Reuters last week that the Trump admin­is­tra­tion must work close­ly with Euro­pean allies as it devel­ops its new Iran policy.

Source: https://www.investing.com/news/commodities-news/draft-senate-iran-legislation-sets-tough-new-us-terms-for-deal-547030

CAIRO (Reuters) — The Kur­dis­tan Region­al Gov­ern­ment in a state­ment ear­ly on Wednes­day offered to freeze the results of an ear­li­er ref­er­en­dum on inde­pen­dence as part of an offer to defuse the cri­sis with the Iraqi cen­tral gov­ern­ment in Baghdad.

The state­ment also called for an imme­di­ate cease­fire and a halt to all mil­i­tary oper­a­tions in the north­ern region. The KRG called for an open dia­logue between Erbil and Bagh­dad based on the coun­try’s constitution. 

Source: https://www.investing.com/news/commodities-news/kurdistan-regional-government-offers-to-freeze-referendum-results-statement-547032

Investing.com — Crude oil prices fell in Asia on Wednes­day after indus­try fig­ures from the U.S. showed an unex­pect­ed gain in crude stocks and investors looked to more from OPEC and allies on chances for out­put curbs to be extend­ed until the end of 2018.

Crude oil inven­to­ries in the U.S. rose by 519,000 bar­rels last week, the Amer­i­can Petro­le­um Insti­tute (API) said on Tues­day, while gaso­line sup­plies fell by 5.753 mil­lion bar­rels and dis­til­late stocks dropped 4.949 mil­lion barrels.

Ana­lysts expect­ed a 2.5 mil­lion bar­rels drop in crude stocks and a 1.9 mil­lion bar­rels decrease in dis­til­lates and gaso­line inven­to­ries off by 1.9 mil­lion barrels.

Overnight, crude oil prices set­tled high­er on Tues­day as Sau­di Ara­bia vowed to end the glut in sup­ply while data expect­ed to show crude oil sup­plies fell for the fifth-straight week lift­ed sentiment.

In what was a volatile day of trade, traders weighed the prospect of an exten­sion to the sup­ply-cut agree­ment after Sau­di oil min­is­ter Khalid al-Fal­ih said Sau­di Ara­bia is will­ing to “do what­ev­er it takes” to rein in excess supplies.

“When we get clos­er to that (five-year aver­age) we will decide how we smooth­ly exit the cur­rent arrange­ment, maybe go to a dif­fer­ent arrange­ment to keep sup­ply and demand close­ly bal­anced so we don’t have a return to high­er inven­to­ries,” the min­is­ter, Khalid al-Fal­ih, told Reuters.

The ongo­ing fluc­tu­a­tion of out­put in Iraq, mean­while, con­tin­ued to con­cern investors as crude sup­plies through Iraq’s north­ern pipeline to Cey­han in Turkey rose fur­ther. Pump­ing along the pipeline rose to 300,000 bar­rels per day (bpd) on Tues­day, Reuters report­ed, cit­ing a ship­ping source.

The uptick in polit­i­cal ten­sions in North­ern Iraq fol­lows con­flict between Iraqi and Kur­dish forces last week, as Kur­dish forces retreat­ed from North­ern parts of Iraq, ced­ing con­trol of two major oilfields.

Source: https://www.investing.com/news/commodities-news/crude-oil-prices-dip-in-asia-after-api-reports-surprise-build-547061

Investing.com — Gold prices dipped in Asia on Wednes­day with a stronger dol­lar weigh­ing and mar­kets await­ing Pres­i­dent Don­ald Trump’s selec­tion for the new Fed chief.

Overnight, gold prices fell on Tues­day as traders con­tin­ued to ditch safe-haven gold amid ongo­ing risk-on sen­ti­ment while an uptick in the dol­lar added to down­side momen­tum in the pre­cious metal.

Gold prices came under pres­sure as the dol­lar edged high­er on signs of progress toward pro-growth tax reform and data show­ing bull­ish man­u­fac­tur­ing and ser­vices growth.

Ser­vices growth, mean­while, con­tin­ued to remain steady amid an uptick in staff hir­ing and busi­ness opti­mism dur­ing Octo­ber. The ‘flash’ US Ser­vices Busi­ness Activ­i­ty Index increased to 55.9, top­ping expec­ta­tions for a read­ing of 55.6.

Gold prices have con­sol­i­dat­ed in recent ses­sions as traders weigh the prospect of fur­ther down­side amid uncer­tain­ty over the future path of inter­est rates and tax cuts.

Source: https://www.investing.com/news/commodities-news/gold-prices-dip-in-asia-on-stronger-dollar-trump-fed-choice-awaited-547074

Technical Analysis

4H

Yes­ter­day we were already test­ing the resis­tance line and wow such volatil­i­ty. Prices went down to the sup­port trend­line and stopped around the 50.90 lev­el before head­ing back up again. So we are back where we start­ed. Let’s see if it breaks to the upside today with the EIA report com­ing out. If we do we can go reach for the 53.79 via 53.45 lev­els. How­ev­er, if we don’t have enough momen­tum build up to push through that big­ger psy­cho­log­i­cal resis­tance lev­el, we’ll see a down­side play back to 51 lev­el. I have an open short posi­tion open at that lev­el so that would be good for me. That’s a posi­tion I kept open because I made a mis­take. After which I con­vinced myself that I should wait a lit­tle before tak­ing a loss on it. I’m will­ing to take a 400 euro loss on it when prices return to the 51.45 lev­el. I’d have to see whichev­er way the wind blows to see if that is a viable lev­el for me to look at. 

Thank you

Thank you as always for being a part of my jour­ney into becom­ing a trad­er. Please feel free to com­ment or ask ques­tions. Let me know what you think.