|Bid||0.00 x 1200|
|Ask||0.00 x 1000|
|Day's Range||18.52 - 18.99|
|52 Week Range||16.48 - 24.41|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.92|
|Expense Ratio (net)||0.90%|
Prices are being pressured by concerns over rising production and falling demand. This is reality. Production is rising, led by increasing output from the United States, Russia and Saudi Arabia, which now accounts for about a third of U.S. daily consumption. Signs of lower demand are beginning to emerge. On Monday, Japan’s Ministry of Finance reported that October crude oil imports fell by 7.7 percent from the same month last year, to 2.77 million barrels per day (bpd).
U.S. West Texas Intermediate and international-benchmark crude oil futures finished lower last week, but the markets did start to show signs of stabilizing after a steep plunge on Tuesday. Furthermore, the price action suggests there was a divergence from the bearish American Petroleum Institute (API) and U.S. Energy Information Administration (EIA) weekly inventories reports.
Crude oil markets continue to show bearish pressure, but we are starting to show signs of support at major levels. I think this is the first attempt to finally slow down the bloodbath in the oil markets.
Crude oil markets initially tried to rally during the day on Friday but have given back some of the gains near the top of the range of the day. I think at this point, perhaps traders are a bit cautious about holding onto oil over the weekend.
Both WTI and Brent crude oil have hit potential support zones on the monthly chart. Additionally, some technical traders have declared the markets oversold. These two factors combined with speculation that OPEC and its allies are considering production cuts are helping to hold the markets in a range.
Crude oil markets continue to bounce from extreme lows, as Thursday was just as bullish as Wednesday. I think at this point; value hunters are starting to come back into this market as Tuesday may have been the climax to bearish pressure.
We get it. Supply is high and demand is starting to weaken, but these factors may have been fully-priced into the market on Tuesday when the markets spiked to the downside. We’re going to start watching the price action closely because of the slight change in the pattern. We are far from turning the trend to up, however, the markets may be ripe for a short-term, short-covering rally.
The crude oil markets rallied over 2%, bouncing from significant levels on Wednesday, and quite frankly they needed to considering how vicious the selloff had been.
Although OPEC has been making increasingly frequent public statements about cutting production in 2019, so far it’s just been talk with little substance. Traders know that a production cut is the only way to stop the supply glut, but they aren’t going to react until a formal agreement has been reached and this may not occur for over a month.
After briefly strengthening on prospects of OPEC production cuts Monday, crude oil prices and oil ETFs plunged Tuesday in response to President Donald Trump's thoughts on any output reductions. On Tuesday, the United States Oil Fund (USO) , which tracks West Texas Intermediate crude oil futures, declined 6.6% and the United States Brent Oil Fund (BNO) , which tracks Brent crude oil futures, decreased 6.2%. Meanwhile, WTI crude oil futures were 8% lower to $55.1 per barrel and Brent crude fell 7.3% to $65.0 per barrel.
On November 12, Brent crude oil January futures settled ~$10.2 higher than the WTI crude oil December futures. On November 5, the spread was ~$10.1. On November 5–12, Brent crude oil January futures fell 4.2%, which was 80 basis points less than the fall in WTI or US crude oil December futures.
Unless there is a major shift in the narrative, prices will continue to fall until traders find value. Technical factors could contribute to a turnaround because some indicators are showing a severely oversold market, but those indicators don’t really predict when the selling will stop and they tend to be coincidental indicators. The first bottoming signal under current circumstances will be a lower-low, higher close chart pattern.
Crude oil-related ETFs finally ended their back-to-back sell off since the end of October as the Organization of Petroleum Exporting Countries and their allies reversed about half the increase in outputs they made earlier this year in face of collapsing prices. On Monday, the United States Oil Fund (USO) , which tracks West Texas Intermediate crude oil futures, rose 0.4% and the United States Brent Oil Fund (BNO) , which tracks Brent crude oil futures, was 0.4% higher. Meanwhile, WTI crude oil futures were 0.1% higher to $60.2 per barrel and Brent crude gained 0.4% to $70.5 per barrel.
Crude oil markets did bounce a bit during the trading session on Monday, after Saudi Arabia has suggested that they may look into cutting back production. We are also at major round figures in both grades that we follow here at FX Empire, so a bounce does make sense. However jumping “all in” is probably rather difficult at this point.
Prices are trading slightly higher as we approach the U.S. opening. This is no surprise because the breaking story calls for lower production and this may be the excuse a few of the short-sellers need to encourage them to start booking profits. However, the story lacks the substance to turn the bears into bulls.
Prices could gap higher early Monday on the news of the Saudi export cuts. Given the severely oversold conditions, the move is likely to be all short-covering. I don’t expect any real buyers to show up because the news isn’t strong enough to reverse the current oversupplied conditions.
Oil rose by more than 1 percent on Monday, set for its largest one-day increase in a month. The rise comes after Saudi Arabia said OPEC and its partners believed demand was softening enough to warrant an output cut of 1 million barrels per day. Brent crude futures rose 92 cents on the day to $71.10 a barrel, while U.S. West Texas Intermediate rose 50 cents to $60.69 a barrel.
Prices could begin the week under pressure if traders take the news about increased rigs as a bearish signal. On Friday, oilfield services firm Baker Hughes reported that U.S. drillers added 12 rigs to U.S. oil fields across the country last week, the biggest increase since the end of May.
Crude oil markets fell again during the trading session on Friday, breaking down below support levels only to turn around and bounce. However, were not out of the woods quite yet and it’s possible that we are seeing a bit of short covering later in the day.
Crude slipped for the 10th day in a row on Friday as an unanticipated spike in supply depressed prices even further, putting the hurt on three of the largest oil ETFs--United States Oil (USO), Invesco DB Oil (DBO) and United States Brent Oil (BNO). The losses were part of a much bigger drop as the bear market in oil has resulted in its longest losing streak since the middle of 1984, based on Refinitiv data. Oil analysts point to a combination of higher-than-expected output from key producers and a gloomy outlook for oil demand.
The downside momentum is building and the only way to stop prices from falling further is to cut production.
Crude oil markets continue to suffer overall as we continue to worry about oversupply. The Iranian sanctions have done nothing to update supply, and of course with the Americans now pumping out over 12 million barrels a day, oil markets had gotten far ahead of themselves.