October Crude Oil consolidated on Thursday, August 25, 2016, making a nominal new low for the week at 46.42 before finding support and getting back above the 47 handle and settling at 47.33. Headlines from Iran dominated the trading session today with Iran indicating they are willing to attend the informal production freeze talks at the International Energy Forum in September. Iran said it is looking for ways to prop up the oil market. One way to do it is to have fast attack boats harass US Ships in the Gulf. Not a smart way to get price moving higher but it can be effective. A US Destroyer fired warning shots near these boats after repeated warnings for them to leave went unheeded. They came within 200 yards of the US ships and wouldn’t leave. The Destroyer fired several flares and attempted radio contact to no avail. The US then followed defensive maneuvers and fired 3 warning shots at the Iranians. This was the second attempt in 2 days by the Iranians to pester the US Navy. The US says it was operating in international waters and of course the Iranians say they were protecting their waters. Crude Oil rallied to the high of the day on the news at 47.46 and stayed in that area to end the day at 47.38 just off the high. If this continues could the US threaten Iran with renewing the sanctions? That would get a nice rally in Crude Oil, but it wouldn’t help the Iranians. Hopefully cooler heads prevail. The rally took Crude Oil near the 8 DMA, now at 47.57 and resistance will be at Wednesday’s high at 47.74. If Crude oil is able to gather strength above yesterday’s high, the next level to watch is 48.32 and trendline resistance is now at 49.12. Support is at Thursdays low and then the 13 DMA at 46.05. The 100 DMA is at 45.66 and the 50 DMA is nearby at 45.58.
High 47.46
Low 46.42
Last 47.38
Daily Pivots for 8/26/16:
|
R2 |
48.13 |
|
R1 |
47.75 |
|
PIVOT |
47.09 |
|
S1 |
46.71 |
|
S2 |
46.05 |
|
|
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RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.
