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Crude Oil

Crude Oil - Correction? Or Change in Trend?The December Crude oil contract has endured a precipitous drop in the past three trading sessions - falling nearly $7 per barrel. Is this just a correction? Are we in the midst of a trend change? The Bullish Case: Crude gapped higher on Monday, October 9th, following the start of the conflict between Hammas and Israel, and the geopolitical risk surrounding the situation served as a bullish catalyst for the crude oil contracts. A primary reason for the rally was anticipated escalation in the conflict, which has yet to materialize - causing the rally to stall. However, the risk of escalation still remains. Third party involvement from other nations or interest groups has the propensity to push crude oil prices even higher than the initial rally following the onset of the conflict. The Bearish Case: The winter months are typically not very kind to crude oil prices. Demand for crude oil wanes as consumers are usually more sedentary during the winter months. The seasonal chart below displays the 5, 10, and 15 year average tendencies for the December Crude Oil contract. Over each of those periods, crude oil prices trended lower from mid-October through November. If escalation does not materialize, it is likely that crude oil will continue to move lower. How Will We Know? In order to keep the uptrend intact, December crude oil will have to defend its recent low around $80/bbl. A turn higher ahead of that point will be a strong indication that crude will buck seasonal tendencies and continue higher. A failure to defend $80/bbl likely indicates that prices will continue to move lower. Check out CME Group real-time data plans available on TradingView here: www.tradingview.com Disclaimers: CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
NYMEX:CLZ2023
by Blue_Line_Futures
The U.S. reveals a trick up its sleeveA few weeks ago, we expressed our bewilderment at the U.S. administration and its handling of the oil stockpiles. Despite oil plummeting below $70 during the summer, officials did not take the initiative to refill the Strategic Petroleum Reserves (also canceling plans to buy oil in July 2023), prompting us to speculate about what trick the administration could have up its sleeve. Finally, last week, we might have discovered exactly what it was when news erupted that the United States lifted some of the sanctions on Venezuela, allowing it to produce and export oil to its chosen markets for the next six months without limitation. While Venezuela’s oil production is only about 800,000 barrels per day, the news announcement is still quite a big thing as it will enable U.S. entities to buy crude oil and help alleviate rising crude oil prices (especially if the country ramps up production in the coming months and the global economy continues to slow down - presuming no broad conflict will affect oil supply in the Middle East). Now, on the topic of technicals, we are paying close attention to the Sloping Support/Resistance. If the price breaks back above the resistance (and holds the ground), it will be bullish. However, a failure will raise our skepticism about more upside. In addition to that, we are watching MACD, RSI, and Stochastic on the daily chart. To support a bearish case, we would want to see all of them continue declining. Contrarily, to support a bullish case, we would like to see MACD reversing and breaking above the midpoint. Illustration 1.01 Illustration 1.01 shows the daily chart of USOIL and a simple setup with bullish prospects above the sloping support/resistance and bearish prospects below it. Illustration 1.02 Illustration 1.02 displays the daily chart of MACD. The yellow arrow indicates a bearish breakout below the midpoint. If MACD fails to rebound back into the bullish area above zero, it will raise the odds for a continuation lower. Illustration 1.03 Illustration 1.03 shows the daily chart of USOIL and simple moving averages. The yellow arrow indicates an impending bearish crossover between the 20-day SMA and the 50-day SMA. If successful, it will bolster a bearish case. Technical analysis Daily time frame = Bearish (with weak trend) Weekly time frame = Slightly bearish Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
TVC:USOIL
by Tradersweekly
4
🛢️ Oil at $88: Told Ya! (Now toss a coin!)Hey Oil Traders! 🤟 Oil is at a critical S/R level of $88, and it's anyone's game right now. 🎯 📈 Recent Trades: Went long under $70 and short at the $93 top. Nailed it! 🎉 🔮 Next Moves: It's a 50-50 toss-up. Could go to $93 or drop to $82. 🪙 🤷‍♂️ Why I'm Not Trading: With such uncertainty, why risk it? There are better setups out there. 🎣 📊 Other Setups: If you're itching to trade, maybe look at other assets. Bitcoin, anyone? 🚀 🤔 My Call: If I had to pick, I'd say we're going lower next. But again, why trade it now? 🤷‍♂️ That's the quick rundown, folks! Sometimes the best trade is no trade. 🤓 One Love, The FXPROFESSOR 💙 long: short:
TVC:USOILShort
by FX_Professor
1
WTI CRUDE OIL: Channel Down emerging.WTI Crude Oil got rejected on Friday on the former HL trendline which should now be considered a Resistance, rejecting the attempt to resume the uptrend. This turned the 1D timeframe technically bearish (RSI = 41.271, MACD = 0.120, ADX = 25.766) and the 1D MACD Bearish Cross (straight after a Bullish Cross) allows us to attempt a short entry, targeting the 1D MA200 (TP = 78.50). See how well our prior idea has worked: ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
TVC:USOILShort
by InvestingScope
4
Oil: Thoughts and Analysis Today's focus: USOUSD Pattern – LH after Trend Break Support – 86.84 - 88.00 Resistance – 90.60 Hi, and thanks for checking out today's update. Today, we are looking at the USOUSD on the daily chart. We are continuing to watch price after it broke the last trendline. So far, we have a new LH after the break, with price continuing to push lower in today's session. Will we see further selling confirm the LH trend break pattern? Price will have to beat support to make this happen; otherwise, a new hold at support and break of resistance could suggest buyers are going to form a new leg up. We will contnue to watch seller momentum today; also, check out the USDCAD, as it may try to make a new push higher, and Crypto, as it continues to push higher into the new week. Good trading.
EIGHTCAP:USOUSDShort
by Eightcap
USOIL Trading IdeaBased on Simple Technical Analysis ( Trendline + Support & Resistance ) Risk Disclaimer: Please be advised that I am not telling anyone how to spend or invest their money. Take all of my analysis as my own opinion, as entertainment, and at your own risk. I assume no responsibility or liability for any errors or omissions in the content of this page, and they are for educational purposes only. Any action you take on the information in these analysis is strictly at your own risk. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Good luck :-)
FX:USOILLong
by ShahedZare
🛢️ USOIL Review 📈🛢️ USOIL Review 📈 USOIL is showing a strong bullish momentum, aligning with the "Smart Money" concept. The recent price action exhibits a compelling heavy impulsive move, indicating significant buying interest. The Smart Money principle involves identifying substantial shifts in market sentiment, and this move certainly captures attention. Notably, we observe just two prominent order blocks within the unmitigated order flow, indicating a clear dominance of buyers. These blocks emphasize the strength of the bullish trend, suggesting that key players are accumulating positions. Given these factors, it's an attractive opportunity for a "buy" position. The heavy impulsive move and limited order blocks support the idea that institutional investors are driving the market higher. Overall, USOIL appears primed for an upward trajectory, making it a compelling prospect for traders. 📊📈🚀🛢️ #SmartMoney #BullishBias
FX:USOILLong
by Asif_Brain_Waves
1
Crude Oil - Elliott Wave CountCrude Oil - Elliott Wave Count Based on the current market trends, it appears that there is a bearish sentiment prevailing. As a result, it is likely that we may witness a decline in the value of the asset to 85 or below. It is important to note that we have set our stop loss at today's high, which means that if the price breaks above this level, we will exit the market. Please note that this information is for educational purposes only, and it is crucial to trade with caution. MCX:CRUDEOIL1! NYMEX:CL1! TVC:USOIL CAPITALCOM:OIL_CRUDE MCX:CRUDEOILM1! EASYMARKETS:OILUSD
TVC:USOILShort
by Treda_pro
WTI CRUDE OIL: Short term sell signal unless this Fib breaks.WTI Crude Oil is on a neutral technical outlook on the 1D timeframe (RSI = 54.002, MACD = 0.110, ADX = 20.935), naturally so as it is ranged between the 1D MA50 and 0.618 Fibonacci level for the past four days. The MACD now formed a Bullish Cross, which gives an edge to buying but only if the 0.618 Fibonacci level breaks. A similar fractal in May-June offered excellent sideways opportunities until the 0.618 Fib broke. Consequently, we are selling (TP = 83.20) for as long as the price is under the 0.618 Fib (and buying the bounces) but will buy if the price crosses over it (TP = 95.00). ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
TVC:USOIL
by InvestingScope
Crude oil - Elliott Wave CountCrude oil - Elliott Wave Count Certainly, here is the rewritten text: Based on market analysis, it appears that crude oil is currently undergoing a triangle correction of wave B, with a projected target range of $89.5. Once the wave B correction is complete, wave C is expected to decline all the way to the $75 range. In light of this, we recommend refraining from taking long positions in a bearish market. Instead, it would be prudent to wait for a reversal and take a short position. Please note that this information is for educational purposes only, and it is crucial to trade with caution. TVC:USOIL FX:USOILSPOT BLACKBULL:USOIL.F MCX:CRUDEOIL1! NYMEX:CL1! TVC:USOIL CAPITALCOM:OIL_CRUDE
FX:USOILSPOTShort
by Treda_pro
MCO: Options Strategy to Capture Crude Oil VolatilityNYMEX: Options on Micro WTI Crude Oil ( NYSE:MCO ), Underlying Futures: NYMEX:MCL1! Riding on last week’s story on TradingView, “Would the Middle East Conflict Push Gold and Oil Prices Higher?” let’s explore option strategy to hedge event risk. Last week, we’ve revisited the event driven strategy and how it could be leveraged to hedge event risk: • I observe that gold prices usually go up in the aftermath of a crisis, as evidenced by its 24% surge in six months after the start of the Covid pandemic. • If a crisis results in economic recession, crude oil prices would go down. Proof: WTI dropped nearly 80% one month after Covid, as lockdowns destroyed oil demand. • In the event of a war, oil prices shot up due to its strategic importance. Example: Crude was up 31% one month after the start of the Russia-Ukraine conflict. • What’s in store to hedge event risk? We explored long futures strategies on COMEX Gold and NYMEX WTI. For my original idea on event driven strategies, please read this: Are these strategies working? We can review them in real time. Micro Gold goes first: • On October 6th, the last trade day before event date (denoted as T0), Gold Futures (T0) = $1,845 per troy ounce for the leading December contract MGCZ3. • Price changes by time: at (T+1): $1,864.3, +1.0%; at (T+7): $1,941.5, +5.2% • Hypothetically, if we opened a long futures position at T0 price and hold it till now, our futures account will gain by $965 (= (1941.5-1845) * 10). • If we take the $780 initial margin deposit as cost base, our theoretical return would be +23.7% (=965/780-1), excluding transactions fees. For WTI crude oil futures: • Futures (T0) = $83.18 per barrel for December contract (CLZ3). • Price changes by time: at (T+1): $84.60, +1.7%; at (T+7): $86.35, +3.8% • Hypothetically, a long futures position would gain by $3,170 (= (86.35-83.18) * 1000). • The theoretical return would be +51.2% (=3170/6186-1), excluding commissions. • We could replicate this strategy using Micro WTI futures ( CSE:MCL ), which is 1/10 of the standard NYSE:CL contract and requires 1/10 of initial margin. Today, I would like to explore options strategy on crude oil, and hope to achieve better results in a cost-effective way. As we know, neither Israel nor Palestine is a major oil producer. So far, global oil supply has not been interrupted by this military conflict. Rising oil price is due to the “price shock” arising from a geopolitical event. However, if the conflict intensifies, it could drag other oil producing nations from the region into conflict. At wartime, there is a real risk of oil field sabotage or blockage of major shipping routines. Either one could result in an oil supply shortage. If you can’t buy a bar of gold, you could choose alternative investment options like bonds or bitcoin. But if we don’t have oil, all other energy sources combined are not sufficient to fill the gap. We would not be able to refill the gas tank. Delivery trucks could not ship meat and vegetables to local grocery stores. There will be a real crisis. Options Strategy with Micro WTI Crude Oil Options In its first week, the conflict has already resulted in thousands of casualties. With the ground fighting in Gaza due to begin any time, the conflict could quickly get out of control in the coming days and weeks. For a comparison: Last year, WTI went up 5.7% one week after the start of the Russia-Ukraine conflict. By the end of the first month, crude oil was up 31%. This time, WTI went up 3.8% in Week 1. Where will oil price be at T+1M? With a “Risk On” scenario like last year, it could go up another 25%, reaching $105 or higher. However, a long-only futures strategy runs the risk of oil price going down. In this rapidly evolving event, senior US officials are in the Middle East negotiating for a cease fire. If peace is achieved, it is good for the world. How do we hedge a long-futures position in a “risk-off” scenario? We could consider a Call Strategy with the Options Contract ( NYSE:MCO ) on Micro WTI Crude Oil Futures ( CSE:MCL ). In the following example, I would illustrate the theoretical payoffs between a long futures position on MCL and an out-of-the-money (OTM) Call with MCO. Market prices and assumptions: • On October 13th, settlement price for MCLZ3 was $86.35/barrel. • For a simplified example, assume there are two possible outcomes in one month. Risk-On: WTI goes up 20% to $103.62. Risk-Off: WTI goes down 20% to $69.08. Futures Trade: • Buy MCLZ3 at T0 settlement. Upfront investment is the $640 initial margin. • Risk-On: Position gains $1,727 (= (103.62-86.35) * 100). Return: +270% (=1727/640). • Risk-Off: Position lost $1,727 (= (69.08-86.35) * 100). Return: -270% (=-1727/640). • In actual trades, when the account balance drops below 22% of the initial margin to $140.8, the trader will be required to bring the balance back up to $640. Options Trade: • Buy a $95 call on MCLZ3 on T0 at $2.02 premium. Total premium is $202, as each contract is 100 barrels of crude oil. • Risk-On: Call strike will be $8.62 in-the-money (ITM, =103.62-95). At today’s market, the 77.75-strike at futures price $86.35 is $8.60 ITM. It is quoted $9.71. Using this as an approximation, we assume our options value to go up from $2.02 to $9.71. • Position would gain $769 (= (9.71-2.02) * 100). Return: +381% (=769/202). • Risk-Off: Call strike will be $25.92 OTM (=95-69.08). Today, the 112.25-strike is 25.9 OTC at current market price. It is quoted $0.58. If we sell the options at the open market, we will realize a loss of $144 (= (0.58-2.02) * 100). Return: -71% (=-144/202). Unlike the physically deliverable standardized WTI contracts, Micro WTI futures ( CSE:MCL ) and options ( NYSE:MCO ) are both financially settled. To exit the position, the trader will enter a trade at the opposite direction. In our examples, a Short December futures MCLZ3 will offset the Long position. For the options trade, selling the same call options will net out the existing position. What are the advantages of an options strategy vs. a futures trade? Firstly, the upfront investment could be much lower with an OTM call. In our example, it is $202, compared to $640 for futures margin. Secondly, a trader could design more complex trading strategies using options. There are multiple calls and puts to serve as building blocks, compared to only one futures contract for each expiration. Thirdly, options payoff is nonlinear. When you are on the right side of the market, the return grows exponentially larger as the call strike gets deeper in-the-money. In our illustration, the same price increase results in 380% gain for options, vs. 270% for futures. Finally, buying a futures contract could incur unlimited losses. If the market goes against you, you could lose more than the initial margin as you may be required to put in more funds to meet margin call. On the other hand, the maximum loss from buying a call or put is capped to the upfront premium. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
NYMEX:MCL1!Long
by JimHuangChicago
1