0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
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
Oil - US Crude
Bullish
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
Bullish
Gold
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
GBP/USD
Mixed
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
USD/JPY
Bullish
More View more
Real Time News
  • US Equity Update (Wednesday Close) : $DJI +1.39% $SPX +0.64% $NDX +0.26% $RUT +1.91% $VIX -3.11%
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.02% US 500: -0.02% France 40: -0.19% Germany 30: -0.26% FTSE 100: -0.52% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/SSroFY3MUn
  • The S&P 500 is very near filling the coronavirus gap down on February 24, it only needs to go another 30 points to 3337 to complete the task. Get your S&P500 technical analysis from @PaulRobinsonFX here: https://t.co/WOWt3btE3X https://t.co/420GUgjBKP
  • Commodities Update: NYM WTI Crude 42.25 (+1.32%), ICE Brent Crude 45.27 (+1.89%), NYM NYH Gasoline 122.54 (+0.91%). [delayed]
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Silver: 3.22% Gold: 0.87% Oil - US Crude: -0.16% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/OZAg17Ojqt
  • #Gold has rallied over $200/oz. since then and late Tuesday broke through $2,000/oz. with ease. Get your $XAUUSD technical analysis from @nickcawley1 here: https://t.co/377MlMYPwT https://t.co/i5fE0zpse4
  • Trump threatens to take executive action on certain relief efforts should congress fail to make a deal - Fox Business News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 95.96%, while traders in US 500 are at opposite extremes with 76.59%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/X22WA5Nxrx
  • Indices Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Wall Street: 1.04% US 500: 0.56% France 40: -0.11% Germany 30: -0.15% FTSE 100: -0.39% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/H9HgvCLdlE
  • US Treasury Yields: 2-Year: 0.109% 3-Year: 0.125% 5-Year: 0.215% 7-Year: 0.391% 10-Year: 0.545% 30-Year: 1.224% $TNX
Crude Oil Collapses into Bear Market Territory

Crude Oil Collapses into Bear Market Territory

2017-06-24 02:45:00
James Stanley, Strategist
Share:
Crude Oil Collapses into Bear Market Territory

Fundamental Forecast for USOil: Bearish

Talking Points:

The correction in Crude Oil continued this week as prices entered ‘bear market’ territory, marked by a move-lower of 20% or more from the 52-week high. WTI set a fresh 10-month low while Brent moved-down to a new 7-month low with prices in both markets falling below a series of key support levels in the process.

A bit of hope developed on Tuesday afternoon leading into Wednesday morning as two key gauges of Oil supply indicated contraction. The API U.S. oil inventory report on Tuesday afternoon showed a drawdown of 2.72 million barrels, almost entirely offsetting last week’s build of 2.75 million. This provided a brief amount of strength for Oil prices as we walked into the EIA report on Wednesday morning, and after a second consecutive weekly drawdown was reported, a very temporary reprieve began to show around the anxiety of a global supply glut. But also within that EIA report was a rise in U.S. Oil production of 20k barrels/day in the prior week, and this is what seemed to really grab markets’ attention as sellers took control of Oil prices shortly after the release of the report.

Normally, a weekly drawdown of 2.5 million barrels would stoke bullish demand with some follow-thru potential; but on Wednesday, that topside move was short-lived as sellers merely used the pop-higher to position in to short positions at better prices. No more than two hours that EIA report on Wednesday and Oil prices had already moved-down to set fresh 2017 lows, with WTI testing below a long-term Fibonacci level at 42.89.

Monthly Chart of US Oil with Trend-Line, Fibonacci Retracement Applied

Crude Oil Collapses into Bear Market Territory

Chart prepared by James Stanley

For Oil bulls this should be a concern as even bullish indications, like a supply drain, are failing to quell the month-long sell-off. That sell-off began right as the OPEC/Non-OPEC extension of production cuts were announced in May, and since that resistance was set – bids have been a fleeting theme for Crude Oil prices and this has led to the thought that an eventual re-test of the $40-handle may be in the cards; and if that can’t hold, major problems may be ahead.

Next week sees the expectation for another supply drop in the United States as inclement weather in the Gulf of Mexico is expected to have hampered production. The key focal points for Oil prices for next week are the API weekly U.S. oil inventory report on Tuesday at 4:30 PM ET, the EIA report on Wednesday at 10:30 AM ET, and the Baker Hughes Rig Count on Friday at 1:00 PM ET. Traders will surely be looking to gauge whether the recent fall in prices has started to disincentives producers, but the bar is incredibly high to reverse what has already turned into an aggressively bearish move.

Retail Positioning in US Crude Flies Higher as Retail Traders Keep Trying to Call a Bottom

Crude Oil Collapses into Bear Market Territory

Above chart indicates IG Client Sentiment in USOil, with net-long positions flying higher this week

Of particular note for trend continuation theses is the current bullish stance of retail traders. IG Client Sentiment is currently showing an imbalance of 4.33-to-1 as retail traders are continuing to try to call a bottom. Given sentiment’s contrarian nature, this would be yet another bearish factor for Crude Oil prices as we move into next week.

The forecast for Oil prices for next week will be held at bearish.

--- Written by James Stanley, Strategist for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

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

DISCLOSURES

News & Analysis at your fingertips.

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.