26 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.
Graphical data is from www.investing.com and Metatrader 4.
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
On https://www.investing.com/commodities/crude-oil this is lasted so I thought to include this in my daily take. I will have a deeper look later on.
Here we can see the technical chart provided by www.investing.com. Here we can see that we are still in the upper part of the 52wk range and we opened at the top of the daily range. However dropped slightly since then, but haven’t touched previous daily lows.
The positive correlated financial markets look a little bullish 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 is in the red meaning upward pressure on crude oil. After taking account of these ‘factors’ that are supposed to be related to crude oil, I will make my personal conclusion if there actually is a correlation or if it actually matters to the way I am trading.
Investing.com – Crude oil prices settled lower on Wednesday as rising crude supplies and a surge in U.S. production offset data showing gasoline supplies fell more-than-expected
Crude oil prices fell for the first time in three days as concerns over a surge in US production weighed on upside momentum while a mixed report from the Energy Information Administration (EIA) showing crude stockpiles rose for the first time in five weeks and gasoline supplies fell more-than-expected failed to lift sentiment.
Inventories of U.S. crude rose by roughly 856,000 barrels in the week ended Oct. 20, missing expectations of a draw of 2.6m barrels.
Gasoline inventories – one of the products that crude is refined into – fell by 5.5m barrels, confounding expectations of a draw of just 17,000 barrels while supplies of distillate – the class of fuels that includes diesel and heating oil – fell by about 5.3m barrels, topping expectations of a decline of 860,000 barrels.
“At the end of the day, crude oil demand is only one part of the equation. If you have strong products demand, that means refineries are going to buy more crude oil to create those products. Demand looks great,” said Michael Loewen, a commodities strategist at Scotiabank in Toronto.
Investing.com — Crude oil price fell in Asia on Thursday as weekly data confirmed a surprise build in U.S. inventories and investors mulled demand prospects globally.
China, the world’s second largest crude importer, unveiled its leadership team on Wednesday and signaled it aims to improve quality of life and trim back rapid export-oriented industrialization in favor of domestic consumption. The switch, expected to accelerate in the next five years in China has potential negative implications for crude oil demand.
TOKYO (Reuters) — Asian stocks barely changed on Thursday, capped as Wall Street shares pulled back from record highs, while the euro stretched gains ahead of a European Central Bank meeting that could take a major step away from its accommodative policy
Japan’s Nikkei (N225), which had its 16-day winning run snapped the previous day, shrugged off Wall Street weakness and rose 0.2 percent, lifted by shares backed by strong earnings.
U.S. stocks fell on Wednesday on a batch of soft quarterly earnings, with the Dow Jones Industrial Average (DJI) suffering its worst day in seven weeks after rising to a record peak the previous session. (N)
In currency markets, the euro added to overnight gains to reach a six-day high of $1.1833 , accompanying a rise by the German 10-year bund yield to a three-week top of 0.50 percent
Yesterday was interesting to see that we started a decline to the 52 dollar level. I believe this to be a crucial point for us to see if the underlying fundamentals will actually push us further down which is good for the one short position I still have open that is losing at the moment. On the other side it would be bad for the long positions I opened thinking the bounce back would retest the 52.40 level again. I’ll keep all open and see how they play out. My strategy here is yes we do need to wait for confirmation. But we can very well see a return to the 52.30 mark before heading further down. That is where I put my stops for the long positions incurring some losses. This I believe is OK since I have made more yesterday in profits than I would stand to lose on them.
If we break out to the downside I would say we are looking at a move towards the 51.50 level via a short stop at the 51.80. If we head back up we will merely retest the 52.30 levels. I think it is more likely for us to see a further drop. But in the crude oil market, you simply never know.
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.