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.
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.
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.
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.
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.
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.
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 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.