23 Oct Weekly take on WTI crude oil

Weekly take on WTI crude oil

This is my week­ly 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 week 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 pos­i­tive putting upward pres­sure on crude oil.

The neg­a­tive cor­re­lat­ed ones look neu­tral. One up, one down. The dol­lar is up though, mean­ing it usu­al­ly puts some down­ward pres­sure on crude oil. Let’s have a look at the relat­ed news.

News

Investing.com — Oil prices set­tled high­er in see-saw trade on Fri­day, as polit­i­cal ten­sions in the Kur­dis­tan region con­tin­ued to dis­rupt crude supplies.

Oil exports from Iraq’s Kur­dis­tan towards the Turk­ish port of Cey­han were flow­ing at aver­age rates of 216,000 bar­rels per day ver­sus the usu­al flows of 600,000 bpd, a ship­ping source said.

Mean­while, in the U.S., investors mulled over data show­ing oil drilling activ­i­ty fell for a third week in a row, extend­ing a two-month drilling decline.

The week­ly rig count is an impor­tant barom­e­ter for the drilling indus­try and serves as a proxy for domes­tic oil production.

Despite the bull­ish sig­nals, ana­lysts warned that OPEC needs to extend its agree­ment to reduce oil out­put beyond its cur­rent March 2018 expiry date in order to rebal­ance the market.

Tues­day, Octo­ber 24

The Amer­i­can Petro­le­um Insti­tute, an indus­try group, is to pub­lish its week­ly report on U.S. oil supplies.

Wednes­day, Octo­ber 25

The U.S. Ener­gy Infor­ma­tion Admin­is­tra­tion is to release week­ly data on oil and gaso­line stockpiles.

Thurs­day, Octo­ber 26

The U.S. gov­ern­ment is set to pro­duce a week­ly report on nat­ur­al gas sup­plies in storage.

Fri­day, Octo­ber 27

Bak­er Hugh­es will release week­ly data on the U.S. oil rig count.

Source:

https://www.investing.com/news/commodities-news/crude-oil-prices–weekly-outlook-october-23–27–545353

Investing.com — Gold prices fell on Fri­day, pres­sured low­er by the stronger U.S. dol­lar which was boost­ed after Pres­i­dent Don­ald Trump’s plans to over­haul the tax code cleared a crit­i­cal hurdle.

Gold futures for Decem­ber deliv­ery set­tled down 0.59% at $1,282.42 on the Comex divi­sion of the New York Mer­can­tile Exchange. For the week, the pre­cious met­al was down 1.86%, which means it has fall­en in five of the past six weeks.

The U.S. dol­lar index, which mea­sures the greenback’s strength against a trade-weight­ed bas­ket of six major cur­ren­cies, was up 0.61% at 93.57 in late trade. It was its largest one day gain since Octo­ber 2.

The index end­ed the week up 0.69%, its fifth week­ly increase in six weeks.

Source:

https://www.investing.com/news/commodities-news/gold–silver–copper-prices–weekly-outlook-october‑9–13–545363

SINGAPORE (Reuters) — Oil prices rose on Mon­day over sup­ply con­cerns in the Mid­dle East and as the U.S. mar­ket showed fur­ther signs of tight­en­ing while demand in Asia keeps rising.

“Oil prices are hold­ing com­fort­ably above $50 as pos­si­ble sup­ply dis­rup­tions in the Kur­dish region of Iraq sup­port prices,” said William O’Lough­lin, invest­ment ana­lyst at Rivkin Securities.

“U.S. pro­duc­tion was also recent­ly impact­ed by a hur­ri­cane for the sec­ond time in as many months and the num­ber of U.S. drilling rigs declined for the third week in a row,” O’Lough­lin said.

In the main growth areas of Asia, con­sump­tion remains strong espe­cial­ly in Chi­na and India, the world’s num­ber one and three importers.

“Three main fac­tors are dri­ving Chi­na’s insa­tiable appetite for crude: declin­ing domes­tic pro­duc­tion, increased access to imports and exports for inde­pen­dent refin­ers, and build­ing up the strate­gic petro­le­um reserve,” Britain’s Bar­clays (LON:BARC) bank said.

Indi­a’s fuel thirst is also increas­ing. India import­ed a record 4.83 mil­lion bar­rels per day (bpd) of oil in Sep­tem­ber as sev­er­al refin­ers resumed oper­a­tions after exten­sive main­te­nance to meet ris­ing local fuel demand.

Giv­en the tight­en­ing oil mar­ket con­di­tions, many ana­lysts expect prices to rise further.

“We will see oil prices high­er by 10 per­cent by the end of the year.

Source: https://www.investing.com/news/commodities-news/oil-prices-rise-on-tightening-supply-strong-demand-545488

Technical Analysis

Week­ly

On the week­ly chart we can see the sup­port and resis­tance lines out­lined in the col­or Magen­ta. Over­all we can see it is fol­low­ing a tri­an­gle pat­tern although the bot­tom of the tri­an­gle has only been twice so in my opin­ion the bot­tom hasn’t been con­firmed yet. But when we look at the resis­tance line we can see that prices have fol­lowed that line quite a bit. Indi­cat­ing a con­firmed resis­tance line. Fur­ther­more we can see that right now prices are retest­ing this same resis­tance line. Let’s see if it breaks resis­tance and we’ll prob­a­bly see a big move to around the 55 dol­lar mark but poten­tial­ly towards the 60 dol­lar mark. Some­thing tells me that won’t hap­pen though but we’ll just have to wait and see.

Adjust and Adapt (evolve)

In the ear­li­er takes I did I would go down in time­frames to look for more clues and give you my bias on what direc­tion I think it’s going to go. How­ev­er, I have come to the real­iza­tion that it doesn’t real­ly mat­ter. Just stick to your plan on the time frames that you want to trade and trade your plan. Regard­less. That’s the main thing you need to learn.

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.