December Crude Oil staged a small rally off its overnight lows on Thursday, October 27, 2016, as the Gulf OPEC nations said they are willing to cut oil production by 4%. The statement came from a meeting between OPEC and Russia as they try come together and hammer out an agreement to cut oil production to stabilize( make it go higher) crude oil prices. Russia came back and said they are unwilling to cut production. They could freeze production at current levels but they won’t cut production. Russia is producing record amounts of crude oil, reaching 11.11 million barrels last month. Traders are starting to doubt that there will be any agreement to curb production of crude oil. Announcements like this caused much larger increases in crude oil just last week, but Crude oil could only test the 50.00 resistance level before drifting lower and trading in a tight range for most of the US session. Thursday’s session formed an inside candle as both the day’s high and low were inside Wednesday’s range. If crude oil breaks out above the Thursday high a test of trendline resistance at 50.60 is possible. Resistance is at 51.00, 51.67 and then the trendline 51.90. Trendline support is at 49.37. A break of the trendline could lead to a test of the low and a failure from the low could send Crude Oil to support at 48.46. Support then comes in at 47.50.
High 50.06
Low 49.00
Last 49.62
Daily Pivots for 10/28/16:
|
R2 |
50.61 |
|
R1 |
50.11 |
|
PIVOT |
49.55 |
|
S1 |
49.05 |
|
S2 |
48.49 |
|
|
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 21 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.
