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.

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
Mixed
Oil - US Crude
Mixed
Wall Street
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
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Emotions are often a key driving force behind #FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here:https://t.co/eILWbFgHRE https://t.co/DjMdgL5x19
  • Technical indicators are chart analysis tools that can help traders better understand and act on price movement. Learn more about the importance of technical analysis here: https://t.co/NpC1D8y4Aa https://t.co/6sqqRfTri2
  • The British Pound, Australian Dollar and US Dollar may all experienced heightened periods of volatility as geopolitical risks in North America, Asia and Europe rattle global financial markets. Get your $GBPUSD market update from @ZabelinDimitri here:https://t.co/0EFToM5Y8I https://t.co/5gsZQfX6aG
  • The New Zealand Dollar may continue to outperform the haven-associated US Dollar as price breaks above key long-term resistance. Get your $NZDUSD market update from @DanielGMoss here:https://t.co/D1DxtDkJXd https://t.co/DwkK9F9FCJ
  • #Gold prices declined following bearish technical cues, but a key zone of support was reinforced over the past 48 hours. #XAUUSD volatility risk is elevated ahead of the #USElection - https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2020/10/30/Gold-Technical-Forecast-Election-Raises-Volatility-Risk-But-Support-Holds.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/5hgGEojvIE
  • What is the US Dollar outlook based on retail positioning ahead of the November 3rd presidential election? EUR/USD may fall as AUD/USD rises. Which way could USD/CAD capitulate? Find out from @ddubrovskyFX here:https://t.co/BVoIcR9anM https://t.co/Frmn9y6yKJ
  • US #COVID19 cases hit a record for a second consecutive day -BBG
  • The Indian Rupee may weaken following a breakout higher in USD/INR. Despite rising global stock market volatility, the Nifty 50 has been holding its ground. Could it capitulate lower? Find out from @ddubrovskyFX here:https://t.co/BNJ5uTKz1A https://t.co/VkvmiwWAtz
  • The US Dollar gained, pushing USD/SGD to break higher. However, USD/IDR may be looking at losses ahead. USD/MYR struggled to breach the March trendline. USD/PHP could rise.Get your market update from @ddubrovskyFX here:https://t.co/6W76mWMRrJ https://t.co/ukJG4eqDK0
  • The #DowJones and #SP500 have as of today averaged: -2.16% & 1.43% 3-months and 1-year before #Election2020 respectively What could this mean for the incumbent president/Trump next week? 👇 https://t.co/e4EyLTzRXl
WTI And Brent Crude Oil Pivots on OPEC Actions to Best Week of 2017

WTI And Brent Crude Oil Pivots on OPEC Actions to Best Week of 2017

2017-07-29 00:23:00
Tyler Yell, CMT, Currency Strategist
Share:
WTI And Brent Crude Oil Pivots on OPEC Actions to Best Week of 2017

Fundamental Forecast for USOIL: Bullish

Talking Points:

  • Crude oil and Brent supported on further actions from OPEC to limit exports
  • The oil supply glut continues to shrink as evidenced by the 7.2m bbl decline per the DoE
  • Dovish Federal Reserve on Wednesday gave way to a weaker USD that helps commodities
  • Per Baker Hughes, US Oil Rig count falls by 2 rig to 766 total active US oil rigs
  • IGCS showing increase in retail short oil positions, contrarian view suggests prices rise further

You know how in some weeks, everything goes well? This week was a week like no other for Crude Bulls as trading started with news out of St. Petersburg that OPEC had reached a further agreement to cut exports from Saudi Arabia (the de-facto head of OPEC), the U.A.E. and Kuwait. Saudi also said they would look to ‘forcefully demand participation’ of compliance to the production curb deal that has been extended to March 2018. After briefly punching below Friday’s low on Monday morning, Crude Oil closed the trading day higher consecutively for the rest of the week until settling near $50/bbl. The total gain was nearly 9% on the week and the environment and sentiment picture (more below) seem to point to more gains to come. What a difference a week can make!

New OPEC actions and oil product demand is helping the energy market. Click here to see our Q3 forecast on what outcomes we're watching!

On Wednesday, news of falling US inventories that aligned with rising demand as evidenced by a 7.2m bbl inventory draw and a decline against other products such as distillate and gasoline touched an aggregate low not seen since early 2016 and helped to provide evidence that the supply glut is indeed shrinking. On an individual basis, Crude stockpiles fell to the lowest levels since January while the EIA shared that the demand for fuel had rising to the highest June level in a decade.

Two related currency markets worth watching in addition to crude oil is the US Dollar and the Canadian Dollar. The USD, which fell deeper this week to a new 14-month low after the Federal Reserve’s statement when they decided not to hike rates showed a likely preference for fewer rate hikes than previously expected is the pricing currency for Oil. Therefore, a weaker USD may provide a further boon to commodities, Oil included. The Canadian Dollar, which ended the week trading aggressively higher and the strongest relative G10 currency showed the seven straight month of GDP growth may also see marginal gains as Oil, a key export becomes more valuable and adds even more to GDP export value.

Combining the positive fundamental picture above with the chart below, and you may find further reason to anticipate further gains. The price of Crude Oil has recently broken above the top of a falling (bearish) price channel that has framed price action for most of 2017. Therefore, if the fundamental picture of rising demand and a weaker USD holds, we could see a move to the lower-$50s in WTI, and mid-$50s in Brent.

Crude Oil price breaks above strong resistance from confluence of levels at $47.29-$48.20

WTI And Brent Crude Oil Pivots on OPEC Actions to Best Week of 2017

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:

  • Sunday: Venezuala votes on President Nicolas Maduro’s constitutional assemply plan
  • Monday 12:00 PM ET: EIA releases Petroleum Supply Monthly
  • Tuesday 4:30 PM ET: API weekly U.S. oil inventory report
  • Wednesday 10:30 AM ET: EIA Petroleum Supply Report
  • 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 suggests rise in price holds

WTI And Brent Crude Oil Pivots on OPEC Actions to Best Week of 2017

Oil - US Crude: Retail trader data shows 41.4% of traders are net-long with the ratio of traders short to long at 1.41 to 1. The number of traders net-long is 3.9% lower than yesterday and 32.6% lower from last week, while the number of traders net-short is 22.2% higher than yesterday and 78.7% higher from last week.

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

The insight derived from this sentiment analysis on Oil is that traders are increasing their short exposure while reducing their long coverage despite recent gains. Taking this into account, the sentiment picture favors further gains.

-TY

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

DISCLOSURES