Three Factors Keeping Oil Prices in CheckAT A GLANCE:
Despite ongoing geopolitical conflict, oil prices and volatility are relatively low
A rise in U.S. crude production and weak demand in China are helping oil inventories maintain average levels
Considering many factors like the Russia-Ukraine war, OPEC+ cutting production by 3.6 million barrels per day and conflict in the Middle East, many traders might be surprised to find out that oil prices are only around $82 per barrel and that implied volatility on crude options are trading at relatively low levels below 40%.
Inventories Remain at Average Levels
So why are crude oil prices not higher and more volatile? Part of the answer lies in inventories. Crude and product inventories are right around their seasonally adjusted averages for the past five years. This suggests that at least some cushion exists in the event of a supply disruption.
Given that oil production is about 3.5% lower globally than it would have been without OPEC+ production cuts, how is it possible that oil inventories are still at average levels? There are two reasons. First, a boom in U.S. production has replaced about one third of what OPEC cut.
The second reason is weak demand. China buys about 10 million barrels per day in the international markets, and its economy has been growing much more slowly than it was a few years ago. Slow growth in China often hits oil prices with a lag of about 12 months and may be among the factors preventing a further rise in global crude prices.
Higher Prices Expected?
That said, traders are displaying some signs of nervousness. The skew on CME Group’s WTI CVOL index is quite positive at the moment, suggesting that some traders are buying out of the money call options to protect themselves from the possibility of much higher prices.
If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
By Erik Norland, Executive Director and Senior Economist, CME Group
*CME Group futures are not suitable for all investors and involve the risk of loss. Copyright © 2023 CME Group Inc.
**All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
QMJ2021 trade ideas
$CL1! 13 May 2024 - Looking good for a long scalp$CL1 is looking set for an intra-day long.
The recent sharp drop below both key moving averages and subsequent movement indicate strong bearish pressure. But it has found short term support and is appearing to be reversing.
Disclaimer:
This analysis is part of my personal trading journal. It should not be considered as financial advice or a recommendation to trade any specific strategy.
Crude**CrudeOil:**
The forecast for Crude this week is for the price to fall to the 76.43 level, that matches with a lost pivot.
5/12 | $CLNot alot of update from last week's chart. We have been creating a base in daily demand zone (green zone) and consolidating as expected. This week, I would like to see some movement to the upside. A break of $80 upside confirms trend for me with first macro target at $83-84.
light oilI expect a corrective movement for oil up to the $74 range.
If the price returns above 82 dollars, this analysis will be invalid.
Crude Steps and Forces- all rectangles are potential support/resistance with the last one blue being a probable exception
- the 3 marked with dots levels can also become support/resistance, especially the first bottom blueish one, but they can also become like milestones levels or steps in the evolution of the price
- the 2 green curves are also potential support/resistance acting as forces pushing the price up or down
This snapshot considers the bullish scenario where the price remains above 66, with potential reversal patterns to occur near the red rectangle zone.
We goin LONG THIS WEEK ON Crude OIL from HTF Discounted DemandNYMEX:CL1!
"Excellence is not a singular act but a habit. You are what you do repeatedly." -Shaquille O'Neal
Last week Sellers were successful in pushing the price per barrel of OIL underneath Major Key Level ($80.00)... Now the reason I believe we are preparing for OIL to go LONG is due to price nearing a Major Unmitigated Daily Demand Zone and approaching a HTF eR/LQ Trendline.... I want to see price mitigate this Daily Demand zone then i'll drop down to the LTF for a confirmation entry model to scale LONG....
Discounted Demand Pricing I want to see mitigated before we enter LONG on a LTF entry model ($77.75 to $77.00)... I will keep update as price develops!!
Remember when it comes to FRM (Financial Risk Management) our job is to manage the downside costs of printing High side returns of $$$ consistently... Let's Step!!
Stay Focused & Reach Excellence!!
#BHM500K #NewERA #Champions
9th May 2024 CL1 Trading PlanNYMEX:CL1! continues to look bullish today.
There might be a small pull back before the price resumes it journey towards 80. The plan is to wait for price action to confirm the direction clearly and look for buying opportunities around 78.70 area. Alternatively if there is no pullback in the morning session, wait for the price to break R1 or the 200 MA before buying.
Disclaimer:
This analysis is part of my personal trading journal. It should not be considered as financial advice or a recommendation to trade any specific strategy.
USOIL is Under PressureWTI crude oil futures are experiencing a downturn, currently priced at $79.37 per barrel, marking a 0.48% decrease. This decline is attributed to the global economic challenges that are negatively impacting the demand forecast. Similarly, Brent crude has seen a reduction in price, now at $83.88 per barrel.
The economic recovery in China is progressing slower than expected, and the anticipation of additional interest rate hikes is exacerbating concerns over economic growth, exerting further downward pressure on oil prices.
In the United States, crude oil inventories have witnessed an increase of 3.4 million barrels in the previous week, contributing to the existing oversupply. The persistent risk of a recession continues to place significant stress on the oil market.
Meanwhile, amidst these market conditions, option sentiment from the CME exchange suggests a robust support level at $75 for WTI futures in the nearest expiration series. This sentiment indicates a strong market belief that prices are unlikely to fall below this threshold, providing a measure of stability despite the current market volatility.
For investors and market watchers, these indicators from the options market are a critical piece of the puzzle, offering insights into future price movements and trader expectations.
WTI could resume upward movementThe bearish trend is still dominant and we have had a clear downward trend. There has been some consolidation since last Friday and a bounce may be due soon.
Entry Point: Wait for the price to break above the downward trendline conclusively during today's morning EUR session.
Considering $79.50 as the profit target, with a stop-loss at $77.50.
NYMEX:CL1!
Crude Thursday Forecast I've been very reluctant to publish any idea's this week intra day, as I believe we are in retracement from the amount we sold off recently.
The 4hr wick CE is the point of interest I have where price respected
I am aiming for the 15min SSL to be broken and a setup form this CME open....
Lets wait and see...
OIl setting up for a bounce here, trade or continuation?We've been out of the #Oil trade for some time now.
It since went about 10% higher, no big deal.
Daily analysis:
Broke its recent uptrend.
RSI oversold - Usually gets a bounce at these levels.
It has been trading in between mid 60's & Low 90's.
Intraday looks like it is setting up for a bounce.
--------------------------------
Weekly Analysis:
You'd figure with tension rising that #OIL would be at a 100, at least.
Daily it broke the trend but it's best to wait until Friday to see if it's going back to the lower part of the trend or bouncing.
Historically, RSI doesn't hang around the 50 area much, shown by the yellow arrow.
The Bears are in Control of CrudeTechnical Momentum Weakens
Crude Oil futures are declining in 2024 after correcting down to the 200-day moving average at $77.88. The technical perspective shows momentum studies declining into oversold territories, with the 9-day moving average trading below the 18-day. DMI- is above DMI +, indicating that the market is in a correction phase, while the Average True Range firms to $1.70 daily.
API Inventories Rise
API Inventory tightness has reversed recently, indicating a more relaxed supply picture. Recent API inventory data shows a build of 509,000 barrels. The current EIA inventories are 460 million barrels, compared to the five-year average of 473 million barrels for this period.
Cushing stocks in the Mid-West show 33 million barrels in inventory versus a five-year average of 44 million barrels.
An Expanding Economic Tailwind
The U.S. economy continues to expand in 2024, driven by the high probability of a soft landing, which fuels investor sentiment. Geopolitical tensions have eased recently; however, there is the possibility of a widening Middle Eastern conflict in the future.
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CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Crude - Pre Market Guessing.So I don't take too much of my time on the weekend trying to figure out where price is going to go as price isnt even active.
So barring any exponential moves Sunday open I am still bearish and have :
Monthly Wick CE and target 1
Weekly SSL as target 2
Pre CME open I will re analyse where the market is and publish further forecast for the day.
QM Descending Channel QM has been trading in a descending channel since breaking down below its previous ascending channel. There's too much speculation about tensions in the middle east and elsewhere to take any big chances on this IMO, so it's best to wait for a break and retest, whether it is to the downside or the upside.
CRUDE OIL 1M1. Symmetric triangle pattern has been observed
2. Good support and resistance formed
I Am Not SEBI Registered Analyst. All Post and Levels Posting is only for educational and knowledge purpose. I Am not responsible for your any kind of loss or profit.
No Claim, All Rights Reserved.‼️
Crude Oil | BULLS MAY DOMINATE THE NEXT DAYSMay is not always a good month for crude oil. When you look at the last 40 years, there is a positive change rate of less than 50%.
However, Crude oil is moving to the support resistance point, and its performance in the last 8 election years, from the beginning of the may to the 21-22 of May during the election years, is 7 years positive and an average return of 12%.
That's why I'm very BULLISH on Crude oil, which is below last year's opening level and at a significant support-resistance flip point.
Crude Oil Testing Line in the SandCrude Oil (June)
Last week’s close: Settled 78.11, down 0.84 on Friday and 5.74 on the week
WTI Crude Oil futures have trended with a lower high for five straight sessions and while trading below first key resistance at 79.49-79.63, it is gearing for the sixth straight session since the April 26th peak. Price action has now tested major three-star support at 78.01-78.43, aligning multiple technical indicators with the upper-end of the consolidation into mid-March. While we now hold a Neutral Bias, there is value seen here, but the market lacks positive momentum.
Bias: Neutral
Resistance: 79.49-79.63**, 79.87-79.90**, 80.31-80.44***, 81.24***, 81.57**, 81.80-81.93***
Pivot: 78.75-78.83
Support: 78.01-78.43***, 76.90-76.98***
Check out CME Group real-time data plans available on TradingView here: www.tradingview.com
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CrudeOil**CrudeOil:**
The forecast for Crude this week is for the price to fall to the zone between 76.68 and 75.84, where we have a lost pivot, and then rise again.
