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
Oil - US Crude
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
More View more
Real Time News
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -0.04% Gold: -0.55% Silver: -2.17% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/uxXP4RiYVd
  • It's been a while since I checked the monthly chart of $EURUSD. Here it is with the 12-bar (12 month) ATR - wandering at the lowest level on record https://t.co/Z5mtDPoY1r
  • The $USD dropped lower after this morning’s consumer confidence figure from the conference board crossed the wires at 130.7, missing expectations of 132.2. Get your market update from @FxWestwater here: https://t.co/YticpX7b20 https://t.co/Hb2PoU8pWF
  • White House Advisor Kudlow: - Further travel restrictions are being discussed - BBG
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.80%, while traders in USD/CAD are at opposite extremes with 69.82%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/zZ5C4ppXAd
  • The S&P 500 continues to push lower in afternoon trading as coronavirus fears accelerate $SPX $SPY https://t.co/pXPtu8oAx1
  • Indices Update: As of 19:00, these are your best and worst performers based on the London trading schedule: France 40: -0.63% Germany 30: -0.71% US 500: -2.30% Wall Street: -2.41% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/WHb5mPP0Hj
  • The 3-day rate of change on the $SPX is matching the extremes of Dec 2018 and Feb 2018. If the selloff continues into the close, it will qualify as the worst stretch over that period since Aug 2015 https://t.co/5FsNK8CcHQ
  • White House Advisor Kudlow: - No expectation for Fed to make panic move - Economic growth in second half of year to be helped by trade agreements - BBG
  • Here we go... Coronavirus expected to cause five-week electronics products shipment delays according to an IPC survey $QQQ $AAPL
Crude Oil Price Forecast: Next Breakout Likely Depends on Algiers

Crude Oil Price Forecast: Next Breakout Likely Depends on Algiers

2016-09-07 17:00:00
Tyler Yell, CMT, Currency Strategist

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

Talking Points:

Oil volatility has fallen recently, but do not expect this quiet market to last. Later this month, the International Energy Forum in Algiers on September 26-28 will provide another highly anticipated opportunity for major Oil producers like Saudi Arabia, Iraq, & Iran to agree to stabilize oil prices by freezing output at current levels.

We recently heard from Iran’s Oil Minister, Bijan Namdar Zanganeh that ~$50-60/bbl Oil is best for OPEC, which could cut one of two ways. Brent Oil (CFD: UK Oil) has recently been trading around ~$50/bbl which could mean they could choose to forego the production increase freeze in hopes the market gets them to where the want to go while at the same time producing more. The more beneficial outcome naturally for Oil Bulls would be to go ahead with the Freeze to encourage the market to get closer to $60 so that the profit margin would be comfortable for the OPEC producers.

Access Our Free Q3 Oil Outlook As Oil's Best Quarter Looks For Confirmation

Lastly, over the weekend, we heard news of a potential Russia-Saudi Oil pact that seemed to dissipate as the market opened on views that they were both interested more in higher prices without the production cut. That would tend toward the first, albeit less influential outcome mentioned above.

Track short-term Crude Oil price levels and patterns with the GSI indicator!

The OPEC Chief, Barkindo has said that he is, “Optimistic about the success of [Algiers].” Of course, there remain many skeptics since this accord is in all-or-nothing fashion so a key player failing to agree would unravel the hope of lower production instead of higher (hopefully) Oil prices.

D1 Crude Oil Price Chart: Pressure On Bearish Channel (Red) Likely To Return

Crude Oil Price Forecast: Next Breakout Likely Depends on Algiers

The chart above shows the price action in US Oil over the summer. For now, the price looks to be ranging from support of ~$40/bbl and resistance of ~$50/bbl. The recent fluctuation around $45 may be helpful for the stability of the market, and may make a move higher strong if it can break through long-term trend resistance that currently sits near ~$49/bbl.

Given the significance of the downtrend from summer 2015, it’s important that we give more credence to continuation over a reversal. However, it would equally be unwise to discount too heavily the developing bullish arguments for Oil.

The weaker US Dollar is a key player, and seasonal tendencies show that trend could continue for the month of September. Above, the 200-DMA has been added to the chart to help you maintain an appropriate bias. The 200-DMA has long been a clear technical bias divider in Oil, and if that remains the case, then the bias is now higher.

You’ll note the 200-DMA ($40.71/bbl) aligns with the median line of the Bullish Pitchfork (Blue) and the early August low. If the price can hold above there, while positive developments build, we’ll continue to await patiently the next breakout higher. A break below this zone will turn us from Bullish to Neutral.

Contrarian System Now Favors Downside Risk as of 9/7/16

Crude Oil Price Forecast: Next Breakout Likely Depends on Algiers

In addition to the technical focus, we should keep an eye on retail sentiment as the downside is beginning to align with our Speculative Sentiment Index or SSI for now.

As of midday-Wednesday, the ratio of long to short positions in the USOil stands at 1.61, as 62% of traders are long. Yesterday the ratio was 1.75; 64% of open positions were long. Long positions are 20.6% lower than yesterday and 8.0% above levels seen last week. Short positions are 14.0% lower than yesterday and 4.9% below levels seen last week. Open interest is 18.2% lower than yesterday and 0.4% above its monthly average.

We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are long gives a signal that the USOil may continue lower. The trading crowd has grown less net-long from yesterday but further long since last week. The combination of current sentiment and recent changes gives a further mixed trading bias.

Key Levels Over the Next 48-hrs of Trading As of Wednesday, September 7, 2016

Crude Oil Price Forecast: Next Breakout Likely Depends on Algiers


Think Oil has more room to run? Trade Oil With Low Margin Requirements (non-US Residents only)

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


News & Analysis at your fingertips.