|Bid||17.56 x 1200|
|Ask||17.57 x 900|
|Day's Range||17.38 - 17.81|
|52 Week Range||14.58 - 24.41|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||2.13|
|Expense Ratio (net)||0.90%|
The crude oil markets broke down rather significantly during the day on Friday as global markets continue to find plenty of reasons to look soft. At this point, it’s obvious that the downtrend is still very much intact.
Crude oil markets continue to struggle overall, as the markets show signs of failure every time we try to rally. There is a downtrend line that the markets continue to test and fail at.
Crude prices are likely to rally today if Powell is hawkish and supports additional rate cuts. However, gains could be limited as long as there are lingering worries over U.S.-China trade relations.
High hopes are riding on Chair Jay Powell’s Jackson Hole speech after an agitated August for investors amid deafening recessionary rhetoric and the escalating trade war. After several pre-Jackson Hole inspired position squeezes, investor fatigue is setting in as the markets have found themselves in a temporary state of pre-Jackson Hole position neutrality.
The markets want to hear that the Fed is ready to be aggressive in its fight to prevent a global recession. If Powell delivers the right message, crude oil prices could rally on expectations that an aggressive Fed policy would lead to higher demand.
The FOMC minutes had a distinctly stale flavour to them as the logical expectation were for a more hawkish tone after the Fed massively underwhelmed on the July rate cut, maintained a positive outlook, and had two dissenters. Beyond that, there wasn’t a great deal in these minutes that was new.
At 14:30 GMT, the EIA will release its weekly inventories report. It is expected to show a 1.4 million barrel draw down. We could see above average volatility with the release of today’s numbers since we are nearing the end of peak U.S. driving season.
The S&P500; fell Tuesday, down 0.8%, and U.S. 10-year Treasury yields fell 5bps to 1.55%. The market seems to have paid little attention to the U.S. president indicating he would explore” various tax reductions” to help stimulate growth, for example. Instead, investors succumbed to apprehension in rates and trade talks.
As I stated yesterday, crude oil was running into a bit of trouble just above and it does look in fact as if that prediction is going to come true. Because of this, there’s a bit of a trend line keep in the market down, and of course major moving averages.
The lower demand numbers are real so traders are paying close attention to the warning from OPEC. On the other hand, the rally we saw on Monday was fueled by hope and optimism. Usually, real wins the battle, but there is always the chance that hope and optimism will turn into reality. Unfortunately, this is not likely to occur over the near-term.
Positive trade headlines and potential fiscal stimulus provided much-needed relief for investors who have been spooked by recessionary cheerleading and toppling bond yields. However, Boston Fed President Rosengren threw a small glass ice water on the risk market rally dubbing the fall in equities since the July FOMC meeting as “not very big”.
Crude oil markets rallied a bit during the day on Monday, but quite frankly they are heading towards significant resistance above that should continue to come into play. With that in mind I’m looking for Shorty opportunities given enough time.
After Friday’s close, Traders were not putting much weight behind current price action thinking it was little more than profit-taking going through from a variety of overextended risk-off bets or as we call it on the desk “a predictable short-covering rally into the weekend.” But risk assets have opened up on stable footings this morning on the back of positive trade comments from President Trump as investors continue to view each sliver of trade optimism in an extremely positive light. This, despite the domino effect from Argentina plus China and the Eurozone economic woes with triggering the U.S. curve inversion panicking investors while sounding the recessionary alarm bells.
Over the weekend, White House economic adviser Larry Kudlow said trade deputies from the United States and China would speak within 10 days and could advance negotiations over ending the trade dispute between the two economic powerhouses if those talks pan out.
Based on last week’s price action and the close at $57.67, the direction of the December Brent crude oil market on Monday is likely to be determined by trader reaction to the minor pivot at $57.97.
The crude oil markets initially tried to rally during the week but failed as we did of forming a shooting star in both grades that we follow here at FX Empire. With this, crude oil looks like it still has many issues.
The crude oil markets fell significantly during the trading session on Friday to close out the week and show signs of weakness yet again. At this point I believe that the market is more than likely going to continue to the downside, so I am shorting.
What bullish traders are really hoping for is a rise in U.S. Treasury yields and renewed strength in U.S. equity markets. This would send an even stronger signal that talk of a U.S. recession is a little premature.
The tone of the market is bearish and not likely to reverse to the upside very much unless today’s U.S. Energy Information Administration’s weekly inventories report posts a much bigger than expected draw down.
Based on yesterday’s price action and the current price at $59.82, the direction of the December Brent crude oil futures contract on Wednesday is likely to be determined by trader reaction to the main Fibonacci level at $59.71.
Trump extends China an olive branch in a bid to support retailers over the Christmas period. China needs to ramp up agri imports to ease tensions further.
The United States and China are likely to continue talking, and the US has delayed tariffs in order to help the situation. Because of this, there was a big huge “risk on” move during the day, but things are starting to calm down as people realize not much is actually changed.
The hope of OPEC production cuts is likely to continue to support prices, however, unless there is evidence of progress in U.S.-China trade negotiations, gains will be limited.