The release of the EIA report created some volatility in November Crude Oil on Thursday, October 13, 2016, as the headline number showed crude oil inventories increasing for the first time in 6 weeks by 4.85 million barrels. Expectations ranged from an increase of 700,000 barrels to 2 million barrels. Crude Oil tanked on this number, trading down to support at 49.36 before rebounding as traders chose to focus on drawdowns in gasoline and distillates plus a large drawdown in Cushing, Oklahoma inventories. Gasoline inventories fell by 1.907 million barrels and distillates by a large 3.746 million barrels. Drawdowns were expected to be in the 900,000 to 1.5 million barrel range for the crude oil products. Cushing, Oklahoma inventories fell by 1.318 million barrels, much lower than the expected build of 100,000 barrels. November Crude Oil traded to a new high for the day at 50.59 and then went to sleep for the remainder of the day as it traded in a tight range from 50.19 to 50.56. It settled at 50.44 and ended the session at 50.55, near the high of the day. If Crude Oil can trade above trendline resistance at 50.74 on Friday we may see another attempt to run up to the June high at 51.67. There is trendline resistance at 51.90. A breakout above the trendline could send Crude Oil prices toward the $55 mark. Support is at 50.20, 49.36, 49.08, 48.30 and 47.41.
High 50.59
Low 49.36
Last 50.55
Daily Pivots for 10/14/16:
|
R2 |
51.40 |
|
R1 |
50.97 |
|
PIVOT |
50.17 |
|
S1 |
49.74 |
|
S2 |
48.94 |
|
|
If you are interested in a Managed Futures program for Crude Oil, check out this offering from Walsh Trading:
Walsh Asset Management Introduces Bluenose Capital
For those interested I hold a weekly livestock webinar on Friday, October 14 at 2:30pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon signup.
Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
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.
