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Oil: Supply Cut by OPEC+, Potential Bull Run?Hi Fellow Traders, Oil prices have impulsively rebounded after reaching the EMA200 line, thus continuing their bullish trend. Concurrently, the prices have formed a falling wedge pattern, which was subsequently followed by a breakout of said pattern. Additionally, the MACD Indicator has exhibited a bullish divergence. The breakout of this pattern and the presence of a Bullish Divergence both signal the potential for an upcoming upside movement, targeting area 1. Following the attainment of target 1, we anticipate a possible pullback to the yellow zone before the continuation of its movement towards the second target. Fundamental Drivers Beyond technical factors, oil prices might sustain levels above $80, supported by diminishing oil inventories and supply reductions from the OPEC+ coalition. It is expected that Saudi Arabia will prolong a voluntary oil output reduction of 1 million barrels per day into October. It is essential to note that the analysis will no longer hold validity once the target/support area is reached. Please support the channel by engaging with the content, using the rocket button, and sharing your opinions in the comments below! Disclaimer: "Please note that this analysis is solely for educational purposes and should not be considered as a recommendation to take a long or short position on TVC:USOIL ."
TVC:USOILLong
by financialfreedomgoals101
7
Heating oil and gasoline supply remain tightOil demand, driven by China is an area of strength, but a slowing Chinese economy could weaken this. However, OPEC’s resolve to keep markets tight is strong. Petroleum product markets – heating oil and gasoline – are especially tight with inventory significantly below normal and prices have hit ‘golden crosses’ : technical analyst parlance for bullish conditions. Positioning in heating oil futures is a standard deviation above 5-year average after rising by 49% last month1. A combination of rising longs and contracting shorts drove the trend amid a 17% rally in heating oil in the past month1. Heating oil inventory has fallen 15% and inventory is now than a standard deviation below 5-year average2. While not as steep as last year, the 0.8% positive roll yield on heating oil futures marks a break from the pre-2022 historic trend of contango in August3. At 8.6%, the positive front month roll yield on gasoline futures appears larger than seasonally normal (although a positive front month roll is expected at this time of the year)3. According to the International Energy Agency (IEA), world oil demand is scaling record highs, boosted by strong summer air travel, increased oil use in power generation and surging Chinese petrochemical activity. Global oil demand is set to expand by 2.2 mb/d to 102.2 mb/d in 2023, with China accounting for more than 70% of growth. With the post-pandemic rebound running out of steam, and as lacklustre economic conditions, tighter efficiency standards and new electric vehicles weigh on use, growth is forecast to slow to 1 mb/d in 2024. Russian oil exports held steady at around 7.3 mb/d in July, as a 200 kb/d decline in crude oil loadings was offset by higher product flows. Crude exports to China and India eased month on month but accounted for 80% of Russian shipments. Global observed oil inventories declined by 17.3 mb in June, led by the OECD. Non-OECD stocks and oil on water were largely unchanged. OECD industry stocks fell by 14.7 mb, in line with the seasonal trend, to 2,787 mb. Industry stocks were 115.4 mb below the five-year average, with product inventories particularly tight. Preliminary data observed by the IEA suggest global inventories drew further in July and August. Refiners are struggling to keep up with demand growth, as the shift to new feedstocks, outages and high temperatures have forced many operators to run at reduced rates. Tight gasoline and diesel markets have pushed margins to six-month highs. Heating oil (Ultra Low Sulphur Diesel) prices rose 17% in the past month, reflecting this tightness. OPEC+’s aggressive cuts are continuing to tighten the oil market. Saudi Arabia’s voluntary supply cuts have helped oil curves remain in backwardation. Source: 1 Commodity Futures Trading Commission as of 15 August 2023 2 change in inventory over the past 3 months, United States Department of Agriculture as of 15 August 2023 3 Calculated as difference between front month and second month futures prices as of 15 August 2023 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.
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by aneekaguptaWTE
USDCAD LONG SETUP BEFORE FOMC + OPECOn USDCAD, we have a bullish setup with the price retracing to the 1.3226 area, touching a minor demand within the main demand zone. I have used this level as a possible entry zone with a target at 1.33. With the upcoming OPEC and FOMC events, the dollar could potentially have a bullish push this morning, considering also the DXI, which appears to have a bullish trend. It would be fantastic if you could share your opinion and give a like to support our work. Greetings and have a good day of trading from Nicola, CEO of Forex48 Trading Academy.
Long
by Forex48_TradingAcademy
2
USDNOK Can See More Weakness As Crude Tryign To FInd A SupportCrude oil is trying to stabilize ahead of the FED today, showing some interesting intraday recovery from around $67.00 per barrel. Can be a small impulse, but I want to see a steady recovery ehre and possibly a broken resistance line to make sure that w-x-y in E of (B) is completed. Also, the global oil supply fell 660k bpd in May on OPEC+ cuts, which can help to stabilize oil price going forward. With higher crude I like NOK. Keep in mind that crude oil and USDNOK, both traded south recently, but crude trying to stabilize now. If it closes higher today, then USDNOK can see much more weakness. Current bears on USDNOK are also acting impulsively so far. GH
by ew-forecast
2
No More Crude Deals!Since its invasion of Ukraine, Russia has been pouring a little too much oil over troubled waters especially as far as the Saudis are concerned. With Moscow pumping cheap crude into the market, downward pressure on the commodity has seen it break and close below a key break-even level for Saudi Arabia. Saudi crown prince Mohammed Bin Salman has scheduled a list of 15 upcoming giga-projects that are intended to transform the kingdom’s economy over the next 10 years. Investment is going to run into the billions and the budget requires oil prices to be above $81 per barrel. An $81 hard floor is essential as attracting significant foreign investment for these giga-projects is proving very difficult. Earlier in the year, Saudi Arabia’s attempts to push oil prices higher by cutting back on production were rendered meaningless by Russia flooding the market with cheap oil despite an earlier promise to also hold back on increased production. This is part of a historical and, it seems, ongoing oil production related geopolitical conflict between Russia and Saudi Arabia (the Russia-Saudi oil price war). Oil prices have been in a sustained downtrend since the March 2022 peak with crown prince Salman getting a major scare in May this year when WTI and Brent crude hit a low of $63 and $71 respectively. A break and close below those levels would have created a cascade of investors exiting the market. Price however rebounded from those lows to consolidate within a tight range. OPEC+ met over the weekend with Saudi Arabia announcing that it will cut production by 1 million barrels a day in order to help prop up price. However, any idea of a done deal that will provide a clear direction for the near and medium-term price of crude should be treated with a healthy dose of scepticism. The Saudis did force some of the less influential members of OPEC+, such as Nigeria and Angola, to reduce quotas from next year but Russia following suit remains “under review” pending further analysis of current output. That’s code to describe how the Saudis and Russians are still fighting with each other to get what each side needs. The post-COVID pandemic world is a much trickier place for oil men and women to cut deals than before. The process of negotiating deals before the pandemic was positively crude compared to the headache-inducing complexity caused by the asymmetrical and mercurial nature of deals in the new geopolitical landscape. The invasion of Ukraine has weakened a Russian economy that desperately needs to find extra revenue to sustain the war effort whilst the Saudis are trying to diversify their economy away from oil by embarking on a series of hugely ambitious and expensive giga-projects. Those two aims are diametrically opposed as far as the output of crude is concerned. The Saudis on the one hand are trying to convince the Russians to stick to their agreement to cut production whilst at the same time planning to further reduce the price of their Arab light grade for customers in Asia. Saudi Arabia has cut the price of oil it sells to its Asian buyers several times already this year in a bid to try and secure its market share in the Asia region that has now become the largest importer of Russian crude. The Saudis are also in talks with the “BRICS bank” for membership and will need the Russians on side at that table, adding to the frustration of how aggressive they can be in convincing the Russians to cut crude production. We remain long-term bullish on crude with buys from strategic dips being the best play but please be mindful of any potential near-term breaks to the downside. We will be posting levels for intra-day traders in the future. Remember, that when you go to the market, be careful out there.
TVC:USOIL
by BluetonaFX
4
Oil -Rising on potential OPEC cut oil productionWell, the technical analysis seems to indicate that Oil is currently in a very strong overbought area, from which we expect it to rise to at least 82. Especially since interest rates may stop rising in the coming period and be fixed at 5.25 or 5.50 With the decline in oil prices due to the economic slowdown, there is a high probability that OPEC will cut oil production at the next meeting, which will cause prices to rise strongly.
TVC:USOILLong
by m-trad-e
1
SPY OUTLOOK 06/05 - 06/09Last week, the debt ceiling lift was signed into law which saved the US from defaulting. All of our upside targets hit last week, and the market reacted favorably with a green week up +3.2%. With not much on the economic calendar, I doubt we move much this week, but expectations of a soft landing can keep bulls in control. Technical Analysis: This week AMEX:SPY broke out to the upside of the megaphone we were watching since April. We are at a critical point in the market as we tested the top of a macro trendline dating back from September 2022. Although I can see the market moving higher in the short term, I’d expect some corrective action in the coming weeks. Even if we head higher, we will need to build some levels of support and resistance if we do head higher. Bulls will want to hold price above the megaphone breakout. If price can continue above last week’s high 428.74, our next level above is 429.57, with not much resistance until 433. What is more likely this week is some sort of healthy pullback before we head higher. I can see SPY coming down to test the daily gap made on Friday (422.92-423.95). If this doesn’t hold, we have a golden pocket from 420-421 where we can look for buyers to step in. Bears will want to invalidate the golden pocket and control price action under last week’s point of control at 419. Upside Targets: 428.74 → 429.57→ 433.07 → 436.10 → 438.08 Extended: 441.21 Downside Targets: 425.14 → 423.95 → 422.92 → 421.02 → 419.00 Extended: 416.22
AMEX:SPY
by peterjames_6
XOM OUTLOOK 06/05 -06/09After finishing March and April strong and making all time highs at 119.92, NYSE:XOM pulled back in May to a key support level around 102. With $CL_F setting up for a bullish week, and the Saudis plan to cut their OPEC+ oil supply by 1 million barrels per day, we could see gas prices rise and a potential buying opportunity in $XOM. Technical Analysis: NYSE:XOM tested a breakdown of the macro channel we’ve been watching, but was able to reclaim the support during Friday’s session. As long as we respect this channel, I can see us continuing higher. We also have a dirty inverted head and shoulders with the daily 102.33 level as the neckline. Bulls will want to hold above 106.26, reclaim the 200 day moving average and break above the weekly level at 107.90. My lean is bullish, and will look at the 50% short retrace at 110.59 as a potential price target this week. Bears will want to see price action below 102.33. Upside Targets: 106.26 → 107.55 → 107.90 → 109.58 → 109.61 Extended: 110.59 Downside Targets: 105.00 → 103.32 → 102.33 → 101.26 → 99.18 Extended: 97.02
NYSE:XOMLong
by peterjames_6
WTI UpdateOkay, the Saudis did cut. I must confess that I underestimated His Royal Highness's ability to surprise. That leaves us with a possible gap on Monday. Given the market pressures and the fact that the previous cut was ineffective in sustaining the price, the gap is unlikely to be as large as in April. The gap is, most likely, wave 3 of (c) of the first wave up in the leading diagonal. There is still a chance that wave (ii) will close the gap, as shown on the chart. MBS, you did an excellent job. I am not as long as I could have been.
TVC:USOIL
by Fomenka
3
USOIL Medium Term UpdateI promised in the previous post that I would discuss medium-term charts. I've been calling for an abrupt rise in ABC flat for a while now. However, price movements develop much more slowly than the human brain expects. I believe I read about this bias in books by R. Prechter on the fundamentals of Elliott Wave analysis. This time, there is another layer of uncertainty because Brent did not follow WTI in the flash crash on May 4, which marked the local bottom (wave B low) for WTI but not for Brent. While my expectation of the impending impulse wave C matches the WTI chart perfectly, it is not the same for Brent, where I anticipate an ending diagonal to complete the correction. This weekend is the much-awaited OPEC+ meeting. However, as I mentioned in my previous post, I suspect limited progress in production-cut talks or a tepid market reaction to any agreed cuts. OPEC core members are grumbling about the cuts as Russia's seaborne exports hit all-time highs to markets that OPEC countries consider their fiefdom, forcing them to redirect volumes to the EU, missing out on shipping. Therefore I doubt OPEC+ can come up with a decision that will drive oil prices sharply higher in June-July and keep them elevated by the end of the summer. OPEC+ decisions usually lag the market developments and tend to cause short-lived fluctuations at best (though painful when unexpected). Instead, war drums and EU discussions about the 11th sanctions package could be the catalysts. The EU is considering prohibiting EU entities from purchasing refined products made of Russian oil. Read - India can no longer buy cheap Russian crude to produce diesel and ship to the EU. I have some ideas about what it could mean for energy markets in the long run, which I will elaborate on in a website article.
TVC:USOIL
by Fomenka
UKOIL's Slippery Slope Heads Towards $60 Before New ATH of $500+Based on analysis of UKOIL's all-time chart from year 18xx, I believe it to be in a massive Flat correction. With Wave A of the Flat stretching down from $145 to $16, this gives implication that Wave B is likely to move up to the range of $331-$557, likely before the year 2030 arrives. RSI divergence on the monthly chart should also be present during the anticipated run to an ATH. If so, this will confirm a very deep and sharp move to follow.
TVC:UKOIL
by DigitalSurfTrading
WTI - ARCH TO TRIANGLE BULLISHWTI - Is forming a good-looking triangle pattern with a complete range June 10-12, if completed we are looking for a HKEX:10 upwards movement till May 24-26 and a HKEX:4 correction to HKEX:82 levels before the conclusion of the figure. This strictly technical analysis requires some push and there is only one player that can possibly play that card and this is OPEC+. We are currently standing around the previous levels when OPEC+ held a meeting over the weekend and we witnessed a HKEX:5 opening gap on the 3rd of April. Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.
NYMEX:CL1!Long
by legacyFXofficial
USOIL - large downside likely due to increase in retail longsUSOIL has been very volatile in the past 2 weeks due to news surrounding further cuts in oil production by OPEC nations. However there has been a large sudden increase in retail long positions and this likely means we see further downside before any resumption of upside. There is a lot of liquidity to be grabbed around the HKEX:69 - HKEX:70 level (H12 OB). There is also a small probability that new lows could be made given the big imbalance in liquidity.
TVC:USOIL
by SeleCTCapital
1
Crude oil extends rally to test 200 MAIn response to a weaker headline US inflation print of 5%, energy and metal prices rose as the dollar dropped. While gold and silver have since come off their earlier highs, copper has managed to push higher. But it is crude oil that is catching the attention with both contracts up more than 2% each. Why are oil prices rising? Well, the biggest reason is from the supply side of the equation, as it often is when it come to oil prices. Following the OPEC’s surprise decision last weekend to cut oil production unexpectedly by nearly 1.7 million barrels per day, this has so far had the intended impact in keeping oil prices supported. After a week-long consolidation near the HKEX:80 level, oil prices have started move higher this week, with WTI climbing above HKEX:83 today. Crude oil has also been supported in part because of the ongoing weakness in US dollar, optimism about Chinese pent-up demand, and the recent upsurge in other commodity prices like gold and silver. The weaker US CPI print has raised doubts over whether the Fed will now hike rates at all next month, after a 25bp hike was priced in with a 75% probability for the May 3 FOMC meeting. Now, that probability has fallen to around 66%, suggesting investors who are feeling that the Fed is near the end of the hiking cycle will feel even more comfortable now. Falling interest rate expectations is reducing recession concerns and helping to support buck-denominated asset prices at the same time. Improving Eurozone economy Crude oil is also finding support because of an improving European economy. While we haven’t had much European data this week, the closely watched Sentix Investor Confidence, which came out on Tuesday, improved more than expected to -8.7 from -11.1, reflecting the recent improvement in Eurozone data. Indeed, last week, we saw German industrial production jumped 2.0% month-over-month in February, easily beating the 0.1% increase forecast and adds to the 3.7% gain in January. In addition, we saw German factory orders surged 4.8% MoM, while the eurozone composite PMI rose to a 10-month high. As result of the improvement in data, Germany is now expected to avoid a recession. Indeed, a couple of German economic institutes now think the Eurozone’s largest economy will grow this year. The German economic recovery has been supported by the reopening of China and strong activity in the automotive sector. Indeed, we saw German exports surge higher in February while imports also rose. More significantly, the German trade surplus has been noticeably higher at the start of this year compared to Q4. The improving German economy and receding concerns over an energy crisis is why the German DAX index has been able to outperform its Wall Street peers so far this year, and why the EUR/USD has been able to get close to the 1.10 handle. But it is not just Germany. A few other Eurozone countries have also been doing relatively well, not least Spain, where the services sector has been going from strength to strength. WTI’s breakaway gap As mentioned in our previous update, WTI was unlikely to fill that big gap it had formed when the OPEC surprised the market with its decision. It had the characteristics of a breakaway gap. After 1 whole week of consolidation around the key HKEX:80 level, WTI never looked like it wanted to close that gap. This gave traders the confidence that they need that the market wants to push higher, and so they have started to bid oil priced higher again. From here, WTI could go to reach $85.00 and eventually even $90.00. In the short-term, I wouldn’t rule out a dip back towards broken resistance range between $81.00 to $81.80ish, given that it is testing its 200-day average. This $81.00 to $81.80 area is now going to be the most important support zone to watch. For as long as the bulls hold their ground here, the path of least resistance would remain to the upside. -- Written by Fawad Razaqzada, Market Analyst Follow Fawad on Twitter @Trader_F_R
FOREXCOM:USOILLong
by FOREXcom
Oil continues to test key resistance after the OPEC surge. Oil continues to hold firm on Wednesday after a strong surge on Tuesday that saw close to two percent added after sellers looked to test the new floor set up by buyers after the stunning gains seen after OPEC's surprise production cuts. Since the news price has sat in a range between $79.65 and HKEX:81 , maybe we would have seen a new test lower to see how firm the gap was. No, buyers made a new push yesterday, breaking out of the mini range, but now continue to be held back at key resistance. Early in the LON session, buyers are trying to push, but resistance remains in play for now. Looking at yesterday's momentum, if we can see it continue, could this be the move that finally clears this level of resistance? We feel that if we do see a break, this could open up buying, and there's a chance we could see the low 90s possibly tested. The drivers behind the rally are firm, but traders will need to keep an eye on the US response if we see oil trading back at certain levels, as this will start to impact their continuing war with inflation. What do you think? Could we see USOUSD trading back at HKEX:83 - HKEX:85 this week or next? Good trading.
EIGHTCAP:USOUSDLong
by Eightcap