Tuesday’s Technical Outlook For: WTI Crude Oil (USO)
$OIL, $USO
Tuesday, major fundamental news hit the wires. A report citing that OPEC has continued to boost Crude Oil production despite its issues of over supply
The price of Crude Oil came under pressure overnight, sold hard throughout the session after secondary sources cited in OPEC’s monthly report stated huge supply increases despite the forecast slowdown in demand, notably from China.
‘OPEC trimmed its estimate of Y 2016 world Crude Oil demand growth by 40,000 BPD to 1.25-M BPD, citing slower growth in China.
With the latest concerns about the supply/demand balance of Crude Oil combined with the technical picture, moves like this happen.
If Bearish Crude Oil, you cannot go wrong with the price action on the daily chart. Price trying to break the major down trend but failing at the 1st mark of near term resistance. Price has also failed to breach its 200-Day MA.
The level marked on the chart shows price tapping resistance and clearing any stops and the weak Longs with it, before being pushed back down.
Look for the reactivation of the trend line as resistance and then a new leg South.
Crude OIL Daily:
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.
Have a terrific week.
HeffX-LTN
Paul Ebeling
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