Friday’s Commentary On Crude Oil (OIL)
$OIL, $USO
Brent Crude Oil at 48.7250, and WTI Crude Oil at 45.8650 are consolidating in here after the sharp rise Thursday. So, be looking at an extended period of sideways trade in both
Contrary to expectation of a further rise the Gold/ WTI Crud Oil ratio (25.01) has fallen sharply over the last couple of days, muddying the outlook in here.
US Crude Oil See-Sawed Thursday, on uncertainty about how quickly the global glut of Black Gold is set to shrink.
Total WTI Crude Oil supplies still stood near marks not seen for this time of year in at least the last 80 years.
The report also showed that gasoline inventories decreased by 1.1-M bbl, compared to expectations for a decline of 0.9-M bbl, distillate stockpiles fell by 3.0-M bbl.
On the ICE Futures Exchange in London, Brent Crude Oil for Dec delivery dipped 22 cents, or 0.46%, to trade at 48.83 bbl. Wednesday, Brent prices rose 2.24, or 4.79%.
In the Asian session, at GMT0400, WTI Crude Oil is trading at 45.91, or +0.46% from Thursday’s close.
WTI Crude Oil is expected to see 1st support at 45.12, a break there could push it to next support at 44.32.
WTI Crude Oil is expected to see 1rst resistance at 46.75, a break there could drive it to next resistance at 47.58.
Crude Oil is showing convergence with its 20 Hr MA, and is trading above its 50 Hr MA.
Outlook: Neutral to Bearish
Position: Short
Crude Oil has fallen this year and US gasoline demand softened. WTI Crude Oil could fall to as low as 10 bbl as the Organization of Petroleum Exporting Countries (OPEC) engages in a “Price War” with rival producers, testing who will cut output 1st.
Iran is soon to release 53-M bbl to the market and will be producing up to 1.5-M BPD in 6 months or so.
Long term technical and fundamental outlook for both Brent and WTI Crude Oil is due South.
OPEC says it will cut production but is not doing that, and are going to see who can stand lower prices longest, since October of 2014 HeffX-LTN sees that Crude Oil is likely is headed for 20 – 22 bbl in the mid term.
Stay tuned…
HeffX-LTN
Paul Ebeling
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