September Crude Oil was able to overcome bearish inventory reports this week as once again OPEC headlines dominate trade. Crude Oil made its low during the overnight session for trade on Thursday, August 11, 2016, getting down to 41.10 on follow through selling from the bearish EIA report. The market turned higher as The International Energy Agency’s August Monthly report once again predicted the energy markets will rebalance in the near future and Saudi Arabia joined the chorus saying there will be an OPEC – NOPEC meeting in September and it could cover stabilization of the market. With the Saudis producing oil at record levels last month (The UAE and Kuwait also produced record amounts of oil) and Iran’s repeated goal of producing 4 million bpd it will be hard for any consensus to be reached. Iraq has reached an agreement with BP, Shell and Lukoil to resume their investments the oil fields they are developing. Iraq wants to increase their output by up to 350,000 bpd in 2017. Russia is also producing just about record amounts of oil. Iran is also looking at taking on foreign investors in an eventual attempt to get over 4 mbpd to 4.6 mbpd. Who will cut or freeze production? Saudi Arabia? I doubt it. For now the headlines are working as the trading algorithms are geared to these types of headlines. The Crude Oil breakdown and the ensuing rally created an outside day candle. It is also a potentially bullish candle as the settlement price was near the high of 43.86 at 43.49. Crude Oil also closed above the 21 DMA (43.00) and could head to resistance at 44.79 (the 100 DMA). It would take a big reversal tomorrow to negate the new found strength in the market, in my opinion.
High 43.86
Low 41.10
Last 43.46
Daily Pivots for 8/12/16:
|
R2 |
45.57 |
|
R1 |
44.51 |
|
PIVOT |
42.81 |
|
S1 |
41.75 |
|
S2 |
40.05 |
|
|
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, August 12 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.
