We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • The $USD may rise versus the Singapore Dollar, Indonesian Rupiah and Malaysian Ringgit if capital flows out of #ASEAN countries as key U.S. data risks a selloff in equities. Get your market update from @ddubrovskyFX here: https://t.co/JWIRn6MLrK https://t.co/y2tXiYs9aV
  • The $USD may be at risk as trader positioning warns that the S&P 500 may bounce as markets look forward to fiscal stimulus. USD/CAD could rise if key support holds down the road.Get your market update from @ddubrovskyFX here:https://t.co/TMq9VZbZ7W https://t.co/H6I3MXjW06
  • As prices dance around on charts, traders are often looking for reasons to explain price movements; however, the underlying source of price movement boils down to the relationship between supply and demand. Learn more about the forces of S&D on forex here: https://t.co/8LfkLXbj2W https://t.co/ZsHdd9NFcO
  • The $USD may be at risk as trader positioning warns that the S&P 500 may bounce as markets look forward to fiscal stimulus. USD/CAD could rise if key support holds down the road.Get your market update from @ddubrovskyFX here:https://t.co/TMq9VZbZ7W https://t.co/TisnGYxllM
  • Here my weekend trading video 'Dow, VIX, Dollar and Gold: Levels and Volatility to Gauge the Markets' https://www.dailyfx.com/forex/video/daily_news_report/2020/03/28/Dow-VIX-Dollar-and-Gold-Levels-and-Volatility-to-Gauge-the-Markets-.html?ref-author=Kicklighter&QPID=917719&CHID=9
  • #Silver and #gold prices have had a fascinating 2020, counterintuitively falling as the #coronavirus’ economic hit has become horribly apparent. A rebound is now afoot. Get your market update from @DavidCottleFX here: https://t.co/nng7lwQ22E https://t.co/JwehIVbBA2
  • Foreign exchange – or “#forex” – markets often pay close attention to politics and central bank policy. We offer a model for traders to gauge their impact on exchange rates. Get your market insight from @ZabelinDimitri and @CVecchioFX here: https://t.co/FbXc1Awu6a https://t.co/mcq5Bq2Jui
  • The $USD soared against the Indonesian Rupiah, with USD/IDR eyeing its best month since the 1997-98 Asia financial crisis amid the #coronavirus outbreak. Can this trend continue? Find out from @ddubrovskyFX here:https://t.co/M3sDZOftrE https://t.co/sbIbp68UOh
  • The $USD may be at risk as technical signals show USD/SGD, USD/MYR and USD/IDR may turn lower. Ahead, the markets will likely weigh US fiscal stimulus bets against dismal data risk. Get your market update from @ddubrovskyFX here:https://t.co/iGqBrY6qyO https://t.co/kJ89YgK3Mm
  • The $USD may rise versus the Singapore Dollar, Indonesian Rupiah and Malaysian Ringgit if capital flows out of #ASEAN countries as key U.S. data risks a selloff in equities. Get your market update from @ddubrovskyFX here: https://t.co/JWIRn6MLrK https://t.co/TEIklRSPA6
Future's Spread Brings Fear That OPEC Did Not Accomplish Much

Future's Spread Brings Fear That OPEC Did Not Accomplish Much

2017-06-10 04:54:00
Tyler Yell, CMT, Currency Strategist
Share:
Future's Spread Brings Fear That OPEC Did Not Accomplish Much

Fundamental Forecast for USOIL : Bearish

Talking Points:

  • Crude Oil trades lower for the third week in as glut expected to be prolonged
  • Fundamentals push futures into Contango which pushes front dated contracts lower
  • Per Baker Hughes, US Oil Rig count rose 8 to 741, 21st consecutive increase

You would be forgiven for thinking that if a collective group like OPEC that controls ~40% of the world output cut production through 2018 that you expected prices to rise. Many thought that and still do, but in the near term that has not been the case and the United States oil producers seem to be to blame. On Friday, Baker Hughes showed that shale production had increased for the 21st straight week and Wednesday’s EIA numbers showed the largest week-on-week change in new supply since 2008. If demand were strong, this backdrop might be OK, but there are concerns on the demand front as well.

On Wednesday, traders will get a triple whammy of US data points that will further hint as to whether or not US demand has a chance at consuming aggressively produced Oil. The data points on Wednesday are June FOMC (rate hike fully priced in), CPI and retail sales. Of course, Wednesday is also the EIA inventory report that traders will watch in hopes that last week’s production and supply build was an outlier and not the start of a worrisome trend.

When looking at the Futures market, we are seeing fear of the later where supply pressures are set to continue and demand will not be there to meet the demand, which would take prices lower. Traders often look at calendar spreads to see what is expected by the market based on current fundamentals. A recent development is a Contango spread where futures contracts for December are trading at a discount to December 2018 deliver to the tune of ~$1.50, which is the lowest level since late November when OPEC announced the extension. A negative time-spread shows inventory stockpiles are too high and the cost of storage and other factors shows traders will pay more for something in the future (futures spot price) than they will currently pay. Friday’s Contango spread per Bloomberg was the widest levels seen in 2017.

Will US crude producers continue to spoil the best-laid plans and efforts of OPEC for the price of Oil? See our forecast to find out what our top minds think on Crude!

Crude barely holding LT price channel support, breakdown could bring a test of $50/bbl

Future's Spread Brings Fear That OPEC Did Not Accomplish Much

Chart Created by Tyler Yell, CMT

Next Week’s Data Points That May Affect Energy Markets:

The fundamental focal points for the energy market next week:

  • Tuesday ~6 AM ET: OPEC Monthly Oil Report
  • Tuesday 4:30 PM ET: API weekly U.S. oil inventory report
  • Wednesday 10:30 AM ET: EIA Petroleum Supply Report
  • Wednesday 2:00 PM ET: FOMC rate decision
  • Fridays 1:00 PM ET: Baker-Hughes Rig Count at
  • Friday 3:30 PM ET: Release of the CFTC weekly commitments of traders report on U.S. futures, options contracts

Crude Oil IG Client Sentiment Highlight: Contrarian view favors further Bearish pressure

Future's Spread Brings Fear That OPEC Did Not Accomplish Much

Oil - US Crude: Retail trader data shows 82.3% of traders are net-long with the ratio of traders long to short at 4.67 to 1. In fact, traders have remained net-long since Apr 19 when Oil - US Crude traded near 5333.7; price has moved 13.4% lower since then. The number of traders net-long is 6.7% higher than yesterday and 40.4% higher from last week, while the number of traders net-short is 15.4% lower than yesterday and 29.3% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Oil - US Crude prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Oil - US Crude-bearish contrarian trading bias. (Emphasis mine)

The insight derived from this sentiment analysis on Oil is that traders are jumping on aggressively to the long side of the market. This could be a precedent to a bearish breakout that we will keep you up to date on if price closes below $43.79/bl for the week and is combined with a further rise in net long positions.

-TY

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.