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Technical analysis update: WTI oil (4th January 2022)Today WTI oil reached our short-term price target of 77 USD per barrel. Furthermore, USOIL broke above the short-term support for a short period of time. Fundamentals remain bullish as OPEC agreed to proceed with a planned production boost of 400 000 bpd in February 2022. This signals OPEC's confidence in the oil market. Additionally, our bullish view is supported by a combination of bullish technical factors. Because of that we would like to raise our short-term price target for USOIL to 78 USD per barrel. We would also like to set a medium-term price target for USOIL to 80 USD per barrel. Technical analysis - daily time frame RSI is bullish. We will observe it in the following days and we'll watch out for a crossover above 0 points. We expect such an occurrence to further bolster the bullish case for oil. Stochastic is also bullish. Recently, MACD performed a bullish crossover above 0 points which is very bullish. DM+ and DM- show mixed conditions. ADX signals that the prevailing trend is relatively weak. Technical analysis - weekly time frame Weekly time frame remains unchanged from our latest update on USOIL. RSI points to the upside which is bullish. Stochastic is bullish too and MACD started to flatten (still in the bullish zone). We will observe MACD in the following weeks and we will watch out whether it manages to stay within the bullish zone and reverse back to the upside. DM+ and DM- show bearish conditions while ADX continues to decline. Though, ADX's value is a little bit higher than the value of ADX on a daily time frame. Illustration 1.01 Picture above shows the weekly chart of USOIL. It also shows setup for head and shoulders being formed. We will observe whether this pattern will continue to develop further. However, at the moment, we believe this pattern will get distorted and price will continue higher. Support and resistance Following support and resistance levels are derived from the peaks and troughs in price of USOIL. Short-term support sits at 73.30 USD and short-term resistance lies at 77.41 USD. Next closest resistance appears at 79.20 USD and then at 81.78 USD. Major resistance lies at 85.39 USD. Major support level can be found at 61.76 USD. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Your own due diligence is highly advised before entering trade.
TVC:USOILLong
by Tradersweekly
2
Geopolitical tensions lend a tailwind to natural gas prices- Aneeka Gupta, Director, Macroeconomic Research, WisdomTree Natural gas prices have declined sharply by 32.8%1 over the prior month. As we discussed here, market price action had run ahead of its underlying fundamentals. A combination of expectations of a warmer than usual winter period in North America2 coupled with the implied reduction in natural gas demand resulted in the recent sell-off in US natural gas prices. There has been little evidence of net physical tightening as storage levels have risen seasonally in a normal fashion, as illustrated below. Net speculative positioning in natural gas futures is below the 5-year average and approaching the 1-standard deviation mark underscoring weak sentiment. Geopolitical tensions escalate over the Russia/Ukraine border Another angle on the natural gas market is the rise of geopolitical tensions, which could tell a more compelling story. Storage levels in the European gas markets are below the seasonal trend at a time when tensions are rising over the build-up of Russian military on the Russian/Ukrainian border. The US is expected to urge Germany to agree to stop the contested Nord Stream 2 gas pipeline if Russian President Vladimir Putin invades Ukraine. President Biden’s intentions were made clear at an important video call between the US and Russia on 7 December 2021. Nord Stream 2 is important both for President Putin, as a route to sell more gas into Europe, and for Germany, which relies on supplies from Russia. This has led to further uncertainty on Russian pipeline supply pertaining to the approval process for the Nord Stream 2 pipeline. At the start of December, European gas in storage was at 67.5% of capacity, compared with a 5-year average of 84% for this time of year, according to Oxford Economics. Additional Russian natural gas supply via the Nord Stream 2 pipeline was expected to gain approval by early January, but the German regulator BNetzA suspended the certification procedure in mid-November. The intentions on the Russian side also remain unclear. The latest Gazprom supply auction suggests that the October and November flows are likely to be mirrored in the December flows, which will do little to counteract the extremely low inventory levels. Added to that, natural gas shipments from Norway are expected to slump by nearly 13% after the Troll field suffered an unplanned outage, according to the Network operator Gassco AS. There are further signs that other sources of sustainable energy from nuclear power are unlikely to be made available in the coming months due to maintenance work being carried out in France’s nuclear power stations. Natural gas futures curve heads back to seasonal norms In November 2021, the front end of the futures curve was very elevated (see 09/11/2021 line in Figure 2). Excluding the very front-month seasonal contango3, the curve was extremely negatively sloped for the following 4 months (backwardation), indicating market tightness at the time. Today (see 09/12/2021 line in Figure 2), the front end of the curve has dropped and is more in line with what is seasonally normal (see previous year curves around this time of year). This indicates abnormal tightness has largely dissipated for the US. The outperformance of front-month tracking broad commodity strategies relative to optimised strategies (that tend to invest further out on the curve observed last month has now largely evaporated with the drop in the front end of the natural gas futures. As an example, let’s look at the Optimised Roll Commodity Index (EBCIWTT), which invests using the same weights as the Bloomberg Commodity Index (BCOMTR) at yearly rebalance in January but, typically, invests further on the curve on contangoed commodities. Over virtually the whole year, it was invested in the April 2022 contract, which led it to underperform as the front end of the curve rose by a much larger extent. This quickly reverted when the gap between the front contracts and the April 2022 contract started to close (see Figure 2), helping the optimised index catch up with BCOM performance and eventually start outperforming from the beginning of December 2021. This is particularly striking when decomposing the return difference between these two indices. In Figure 4, we decompose it by sector, splitting Energy between Natural Gas and the Oil Complex. See how Natural Gas represented much of the underperformance when the front end of the curve was extremely steep. That negative contribution quickly shrank from November this year, eventually turning positive in December. Conclusion US natural gas prices have fallen with supply and inventory conditions returning to normal in the country. However, tightness in Europe could once again translate to higher demand for US exports. Amidst the depth of the European winter, as heating demand grows, low stockpiles in Europe would mean elevated demand to replenish them when the summer season arrives. This is likely to translate into higher demand for US natural gas at a time of higher uncertainty of supply from neighbouring countries such as Russia and Norway. However, in the absence of renewed tightness in US natural gas stemming from the higher European demand, US natural gas futures curves could maintain their current structure. That could leave prime conditions for optimised commodity strategies to outperform front-month tracking strategies. Sources 1 Bloomberg – Henry Hub US Natural gas prices as of 7 December 2021 2 NOAA – National Oceanic and Atmospheric Administration 3 See “Commodity ETPs are exposed to futures contracts not the physical spot. Why does it matter?” for a description of contango, backwardation and why these are important concepts in commodity market futures investing. This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
RUS:NG1!
by aneekaguptaWTE
Devon Energy - It's complicated (TL;DR @ end)To start off. Few people have even heard of Devon Energy unless they actively deal with commodities and the energy industry. Devon Energy Corporation ( NYSE:DVN ) is an Oklahoma based hydrocarbon exploration company that produces (primarily) natural gas and oil. Considering the company was only founded in the early 70s, they have quite the interesting market history since their IPO in 1988. They had absolutely spectacular growth prospects from around 2000 through to 2007. Unfortunately at one such spectacular peak (around 1700% gain since May 2000) the stock market crash of 2008 occurred in the fourth quarter. This threw their stock down drastically like many other companies and for another 12 years after that, they declined with 2 signs of a 'comeback' that were not exactly fruitful. Recently, they have taken the market by absolute surprise, beating the S&P 500 by more than 150 percentage points, announcing a revision of their already generous dividends (especially in comparison to their competitors), 3rd quarter earnings and the anticipated earnings published by various analysts. Needless to mention they were 1 of 3 very popular non-tech stocks to beat the market by a considerable amount (YTD). Their 3rd quarter earnings report and their recently published sustainability report regarding their operations in the Permian Basin have instilled hope in many investors and many are anticipating a bull market despite the, already occurring strong buy indicators. Whether this may be considered another one of those fruitless 'comebacks' is very much up for debate. The increased dividend payout may just be a sign that they have altered their policies for the long-term loyal investor and future prospects may very well be extremely profitable, especially given the current market conditions and maybe the 'low'* P/E multiplier may just be a sign of future performance and inherent value too. As usual, any other opinions, news and facts are always welcome, thank you for reading and comment away! TL;DR: NYSE:DVN has had a confusing past but increased 3rd quarter earnings, a moderately attractive P/E ratio (YTD), future earnings from their main operations in the Permian Basin and a dividend revision may all just hint towards a better future for the company and potentially a profitable investment or it may very well turn out to be another fruitless price climb that results in another drop. *In this case, I have used the term 'low' relative to other corporations of similar scale that deal with commodities and what PE multipliers they acquire when under a growth period.
NYSE:DVN
by Michael_Axio
$KOS black gold*This is not financial advice, so trade at your own risks* *My team digs deep and finds stocks that are expected to perform well based off multiple confluences* *Experienced traders understand the uphill battle in timing the market, so instead my team focuses mainly on risk management* Recap: My team has been covering oil stocks due to the obvious demand for the good due to Covid-19 restrictions coming to a close. Loosened restrictions will increase work and consumer travel, meanwhile tensions in the middle east just may be the catalyst of a huge spike in oil prices in the near future. $KOS is an oil company that focuses on field developments for accelerated production and depicts strong growth opportunity going forward. My team entered $KOS on 6/16/21 at $3.28 per share. Today we're averaging up at $3.46. We still plan to take profit at $5.00 per share, but with the way the economy is moving oil could possibly exceed analysts expectations... If you would like to see more, please like and follow us @SimplyShowMeTheMoney
NYSE:KOSLong
by SimplyShowMeTheMoney
4
Natural Gas LONG News: The US benchmark for the price of natural gas was in recovery mode on December 3 after falling significantly over the last four trading sessions. The January gas delivery contract at the US Henry Hub was up 3.6% as of 12:25 GMT to trade at $4.20/mn Btu. The benchmark, however, lost 25.5% over the previous four trading sessions. The latest natural gas weekly report from the US Energy Information Administration shows working natural gas stocks are 10% lower then year-ago levels and 2% lower than the five-year average through 2020 for this week. Moderate weather for the continental United States, however, has kept Henry Hub below recent highs of around $6/mn Btu. The National Oceanic and Atmospheric Administration in its latest monthly forecast calls for above-normal temperatures across most of the Lower 48 states. In the more immediate forecast, the National Weather Service said to expect record-breaking high temperatures for this time of year for parts of the country, though the Northern Plains and Upper Midwest could see heavy snow during the weekend.
NYMEX:NG1!Long
by DubaiTraderLLC
2
NATGAS Bullish Setup! Buy! Hello,Traders! NATGAS has retested a support cluster Formed by the rising support and a horizontal key level I am bullish on Gas overeall, and my bias is supported By the recent bullish breakout from the local falling channel Taking everything into consideration My verdict is that Gas will most likley go up mid-term The target you see on the chart is a good TP level But I also belvie that Gas might go even higher To retest the recent all-time-high Buy! Like, comment and subscribe to boost your trading! See other ideas below too!
NYMEX:NG1!Long
by TopTradingSignals
6