Wednesday’s Technical Outlook For WTI Crude Oil (USO)
$USO, $OIL
US Crude Oil prices rose to YTD highs, driven by news indicating that Russia and Saudi Arabia have agreed to freeze output ahead of the Doha meeting of Crude Oil producers this weekend, adding that the final decision will not depend on Iran.
WTI Crude Oil futures finished at 42.17 bbl, or + 4.5%.
The daily shows that Black Gold rallied further beyond its 200-Day MA, and holds at marks last seen last November.
The technical indicators have rallied above their mid-lines, and maintain strong Bullish slopes, supporting some further gains towards the 45.00.
In the near term, the 4 hours shows that the Momentum indicator has retreated some from overbought territory, but the RSI indicator continues heading higher around 79, this supporting a continued advance.
Further supporting the Northside in this last time frame, is a strongly Bullish 20-Day SMA that has crossed above the 100 and 200-Day SMAs well below the current marks.
Support marks:41.80 41.10 40.50
Resistance marks:42.30 42.90 43.60
Crude Oil has been trading higher on speculation that there could be some “freeze” in production by the majors producers, Saudi Arabia, Russia and Iran. I believe that is remote, in fact very challenging.
| It is still possible that WTI Crude Oil could fall to as low as 22-26 bbl as the Organization of Petroleum Exporting Countries (OPEC) engages in a “Price War” with rival producers, testing who will cut output 1st. It has already shut out the high cost producers, driving some US operators into bankruptcy.
Iran has been slow to re-enter the market, but remember the nation still has about 53-M bbl in storagem and will be producing up to 1.5-M BPD in few months. Long term technical and fundamental outlook for both Brent and WTI Crude Oil is 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. Stay tuned. Paul Ebeling HeffX-LTN |
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