• 13 hours Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 13 hours Oil Gains Spur Growth In Canada’s Oil Cities
  • 14 hours China To Take 5% Of Rosneft’s Output In New Deal
  • 15 hours UAE Oil Giant Seeks Partnership For Possible IPO
  • 15 hours Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 16 hours VW Fails To Secure Critical Commodity For EVs
  • 17 hours Enbridge Pipeline Expansion Finally Approved
  • 18 hours Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 19 hours OPEC Oil Deal Compliance Falls To 86%
  • 1 day U.S. Oil Production To Increase in November As Rig Count Falls
  • 2 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 2 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 2 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 2 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 2 days Aramco Says No Plans To Shelve IPO
  • 4 days Trump Passes Iran Nuclear Deal Back to Congress
  • 4 days Texas Shutters More Coal-Fired Plants
  • 5 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 5 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 5 days Chevron Quits Australian Deepwater Oil Exploration
  • 5 days Europe Braces For End Of Iran Nuclear Deal
  • 5 days Renewable Energy Startup Powering Native American Protest Camp
  • 5 days Husky Energy Set To Restart Pipeline
  • 5 days Russia, Morocco Sign String Of Energy And Military Deals
  • 6 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 6 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 6 days India Needs Help To Boost Oil Production
  • 6 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 6 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 6 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 6 days District Judge Rules Dakota Access Can Continue Operating
  • 7 days Surprise Oil Inventory Build Shocks Markets
  • 7 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 7 days Syria’s Kurds Aim To Control Oil-Rich Areas
  • 7 days Chinese Teapots Create $5B JV To Compete With State Firms
  • 7 days Oil M&A Deals Set To Rise
  • 7 days South Sudan Tightens Oil Industry Security
  • 7 days Over 1 Million Bpd Remain Offline In Gulf Of Mexico
  • 7 days Turkmenistan To Spend $93-Billion On Oil And Gas Sector
  • 8 days Indian Hydrocarbon Projects Get $300 Billion Boost Over 10 Years
Alt Text

Copper Prices Ignited By Chinese Demand Growth

Copper prices saw some gains…

Alt Text

Will Ecuador’s Mining Sector Return To Its Golden Days?

Despite the recent political problems…

Crude oil – Approaches $100/Barrel…Not this Time

In the last 10 weeks Crude oil has added $12/barrel lifting prices as of this post to four month highs with August futures flirting with the $100/barrel level. Not that the fundamentals have mattered in the energy complex but Crude oil inventories are at the highest levels they’ve been in years.

US Crude Oil Stocks

For the last 10 months with the exception of a few sessions August Crude oil futures have been contained in an $11 trading range, identified by the horizontal green lines in the chart below. Current trade has futures about $1 below that pivot point and $2 below the psychological $100/barrel mark. Stochastics are showing overbought levels and prices are the furthest they have been above their 100 day MA (light blue line) since reaching an interim top in the first week of April…followed by a collapse of $10/barrel in the span of 3 weeks. Past performance is not indicative of future results.

$100 Barrel…not this time!

Crude Oil Futures

The outside market influence is somewhat supportive with equities advancing off their 50 day MAs last week. The problem I have with this is I suspect stocks are running on fumes. Additionally if we get a dead cat bounce in the US dollar Crude should exhibit an inverse correlation. It is a hurry up and wait situation as ample apprehension exists with market participants waiting for an FOMC decision tomorrow…the Fed will provide more clarity on the path of QE moving forward. To Taper or not to taper? The fact that a fear premium over Syria has been priced in and further conflict does not look imminent one would expect that premium...say $3-4 to be stripped out of the price in the coming weeks.

As for the trade…My suggestion is short futures in either August or September contracts while simultaneously selling out of the money puts 1:1. A 50% Fibonacci retracement puts August futures $5.75 lower.  Confirmation of an interim top would be delivered in my eyes on a settlement under the 8 day MA (orange line) currently just under $97/barrel. I think a reasonable first objective is the 50 day MA (green line) which also is the same level as the 38.2% Fibonacci level.

By. Matthew Bradbard

Risk Disclaimer: This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities and/ or financial products herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed to be accurate. You should fully understand the risks associated with trading futures, options and retail off-exchange foreign currency transactions (“Forex”) before making any trades. Trading futures, options, and Forex involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, and recommendations are subject to change without notice. Past performance is not necessarily indicative of future results. This report contains research as defined in applicable CFTC regulations. Both RCM Asset Management and the research analyst may have positions in the financial products discussed.




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News