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
Bearish
Wall Street
Mixed
Gold
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
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • YouGov MRP poll has Joe Biden winning 350 electoral college votes vs Donald Trump's 188 https://t.co/WDtIRbAjxc
  • Forex Update: As of 10:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 1.14% 🇦🇺AUD: 0.42% 🇨🇭CHF: 0.27% 🇯🇵JPY: 0.20% 🇳🇿NZD: 0.13% 🇨🇦CAD: 0.12% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/YRBEIKTqht
  • Have you been catching on your @DailyFX podcast "Global Markets Decoded"? Catch up on them now, before new episodes release! https://t.co/Twr44cZ1GB https://t.co/vGsD1XQ1iO
  • Indices Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Germany 30: 2.72% France 40: 2.05% FTSE 100: 1.45% US 500: 0.92% Wall Street: 0.92% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/gndH5K2dbX
  • BoE's Ramsden says the BoE are not about to use negative rates imminently
  • BoE's Ramsden says if you have negative rates in the toolbox, you are duty bound to explore in more detail the operational considerations $GBP
  • BoE's Ramsden says he sees effective lower bound is still at 0.1% $GBP
  • BoE's Ramsden says the initial fall in the UK and global activity was less sharp than BoE feared in May $GBP
  • Japan will remove travel bank for 10 countries or more from from the beginning of October, according to Nikkei Asian Review
  • Brexit latest: Unlike the EU, the UK have tunnel vision https://t.co/yKrIlhghPV
WTI Crude Oil Trades Intraday to 2017 High As OPEC Breeds Confidence

WTI Crude Oil Trades Intraday to 2017 High As OPEC Breeds Confidence

2017-11-04 01:53:00
Tyler Yell, CMT, Currency Strategist
Share:
WTI Crude Oil Trades Intraday to 2017 High As OPEC Breeds Confidence

Fundamental Forecast for USOIL: Bullish

Talking Points:

  • OPEC Ministers, led by Saudi’s backs longer cuts and further encourages Oil Bulls
  • Big Oil’s earnings show that confidence is emerging as WTI trades intraday to 2017 highs
  • Per BHI, US Oil Rigs falls by 8. Rig count drops to 729 active US oil rigs
  • IGCS showing increase in retail short WTI oil positions w/w, contrarian view favors push higher

The price of Crude Oil is set to rise another week, making it the fourth advancement of both WTI Crude and ICE Brent Oil. In late trading on Friday, WTI Crude Oil rose to the highest intraday level since July 2015. After a weak start to October, the price of crude has risen aggressively alongside base metals on a comparable convergence of demand beginning to outstrip supply. OPEC’s annual meeting in Vienna later this month will be a key event where the leaders of OPEC are expected to agree on

A key driver of higher crude oil has been the expressed view by OPEC’s largest exporter, Saudi Arabia’s oil minister, Khalid Al-Falih, who said the “Mission is not accomplished.” Traders should note that this was said as Brent (the global oil benchmark) traded at 27-month highs as producers pump less leading to lower output and higher prices. From a strategic perspective, OPEC+ (a moniker for OPEC and key allies like Russia) appears to be taking the long view, which has been validated by the forwards curve.

The forward curve in Brent is showing the most bullish view in nearly three years as the lowest point through 2019 is at $56, which lifts the floor of expected future Brent prices. Much of this rising forward curve is based on signs that OPEC will agree to extend the curb production pact either six or nine months after the deal expiry of March 2018. In the US, a positive weekly EIA Crude Oil Inventory Report showed the glut appears to be over as Oil stockpiles fell to a two-year low as exports, hit a new record last week showing the pick-up in global demand.

Lastly, earnings from big oil firms were undoubtedly positive and optimistic as Q3 earnings hit the market in recent weeks. In addition to confidence that OPEC will back an extension in production curves, Oil service companies see higher prices and higher demand on the horizon forecasting an increase in earnings. Now the equity prices of oil companies are aligning and catching up to the price of the product they discover, refine and/ or deliver.

A global rise in demand Click here to see our Q4 forecast on what outcomes we're watching!

Now, on to the charts. The price of crude oil continues to move higher and hug the top of a channel drawn off the July low of $42.03, and the initial high in the channel from the early August high of $50.43. There is a broader channel drawn off key pivots from 2014 and early 2015 that favor price resistance near $56.50. Lastly, a Fibonacci extension favors a potential push toward $59.08. Given the momentum of positive fundamental developments and supply falling against demand growth, we could see this ‘extreme’ level tested and broken before year-end. The sentiment picture below also favors looking at further gains. Currently, on a close and break below the late October low of $50.70 would stain the Bullish view. Until then, sights remain on further price upside.

Crude Oil price expected to hold above $49-51 polarity zone, upside focus for WTI at $59.08

WTI Crude Oil Trades Intraday to 2017 High As OPEC Breeds Confidence

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:

  • Monday 2:00 PM ET: EIA Monthly Drilling report to be released Monday
  • Tuesday 9:30 AM ET: OPEC’s World Oil Outlook to be published, with press conference by Secretary-General Mohammad Barkindo
  • Wednesday – Time uncertain: China commodity & energy trade data for October, including crude
  • Wednesday 10:30 AM ET: EIA weekly US Oil Inventory 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 of retail positioning favors upside

WTI Crude Oil Trades Intraday to 2017 High As OPEC Breeds Confidence

Oil - US Crude: Retail trader data shows 35.4% of traders are net-long with the ratio of traders short to long at 1.82 to 1. In fact, traders have remained net-short since Oct 25 when Oil - US Crude traded near 5266.8; the price has moved 4.6% higher since then. The number of traders net-long is 7.1% lower than yesterday and 15.9% lower from last week, while the number of traders net-short is 10.3% higher than yesterday and 22.4% 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 added).

-TY

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

DISCLOSURES