The selloff in the price of crude has gathered pace after Friday's report, but how much further can it go and what are the longer term outlooks on a technical analysis basis?
Oil made fresh 6-year lows yesterday at levels not seen since March 2009, following speculation that records U.S. supply may start to strain the country's storage capacity. The International Energy Agency predicted that oil storage tanks could fill up as drilling rigs fail to slow production and government data showing that US output and stockpiles have expanded to their highest level in over 30 years.
According to the Commodity Futures Trading Commission data, bullish speculators cut their position in WTI to their lowest level in over 2 years. Whilst positons on the short side increased last week to record levels. Former Federal Reserve Chairman Alan Greenspan, said in a recent Bloomberg TV interview that ‘the oil price hasn’t bottomed yet because tanks at the U.S. storage Hub are reaching full capacity’ and experts say that weak demand, moderate economic growth and a strong dollar cannot keep pace with the current production levels which are continuing strongly. U.S. storage tanks are about 63 % full, according to Soc Gen's oil market research team, around 448.9 million barrels which is the highest level in weekly records dating back to August 1982.
Despite a cut in the number of rigs, with companies ceasing around 710 rigs (a reduction of 45 per cent), increased production techniques are expected to expand U.S. oil production by 750,000 barrels per day to 12.56 million according to the IEA. It was announced yesterday that oil shale producers have cut investment by $50 billion over the next 12 months.
With currencies of net crude oil exporting companies such as the Canadian dollar ( lowest level since March 2009), Norwegian krone and Russian ruble coming under renewed pressure and continuing until a bottom is seen in crude. The selloff in the price of crude has gathered pace after Friday's report, but how much further can it go and what are the longer term outlooks on a technical analysis basis?
In the short-term, prices are likely to remain under pressure with at least one more push to the down side, possibly two, to finish the wave 3 down. Several supports have been broken in this move lower and there is not much support below the lows yesterday at ……… with the psychological level of $40 per barrel. However, with the RSI in the hourly showing oversold and divergence from the weekly opening low a turn higher could be imminent.
Any pull back will find resistance between the 44.78 and 45.83 as well as 46.80 and 48, which following yesterday's move seems a long way away.
Once the final wave down in wave C is completed below expected, a stronger rally to occur up to the $68.09 and the 61.8% retracement actually lies as high as 83.22 before the next leg down gets underway for lows somewhere between $20-$30 per barrel
Oil made fresh 6-year lows yesterday at levels not seen since March 2009, following speculation that records U.S. supply may start to strain the country's storage capacity. The International Energy Agency predicted that oil storage tanks could fill up as drilling rigs fail to slow production and government data showing that US output and stockpiles have expanded to their highest level in over 30 years.
According to the Commodity Futures Trading Commission data, bullish speculators cut their position in WTI to their lowest level in over 2 years. Whilst positons on the short side increased last week to record levels. Former Federal Reserve Chairman Alan Greenspan, said in a recent Bloomberg TV interview that ‘the oil price hasn’t bottomed yet because tanks at the U.S. storage Hub are reaching full capacity’ and experts say that weak demand, moderate economic growth and a strong dollar cannot keep pace with the current production levels which are continuing strongly. U.S. storage tanks are about 63 % full, according to Soc Gen's oil market research team, around 448.9 million barrels which is the highest level in weekly records dating back to August 1982.
Despite a cut in the number of rigs, with companies ceasing around 710 rigs (a reduction of 45 per cent), increased production techniques are expected to expand U.S. oil production by 750,000 barrels per day to 12.56 million according to the IEA. It was announced yesterday that oil shale producers have cut investment by $50 billion over the next 12 months.
With currencies of net crude oil exporting companies such as the Canadian dollar ( lowest level since March 2009), Norwegian krone and Russian ruble coming under renewed pressure and continuing until a bottom is seen in crude. The selloff in the price of crude has gathered pace after Friday's report, but how much further can it go and what are the longer term outlooks on a technical analysis basis?
In the short-term, prices are likely to remain under pressure with at least one more push to the down side, possibly two, to finish the wave 3 down. Several supports have been broken in this move lower and there is not much support below the lows yesterday at ……… with the psychological level of $40 per barrel. However, with the RSI in the hourly showing oversold and divergence from the weekly opening low a turn higher could be imminent.
Any pull back will find resistance between the 44.78 and 45.83 as well as 46.80 and 48, which following yesterday's move seems a long way away.
Once the final wave down in wave C is completed below expected, a stronger rally to occur up to the $68.09 and the 61.8% retracement actually lies as high as 83.22 before the next leg down gets underway for lows somewhere between $20-$30 per barrel
This article is written by Matthew Clark who is the owner of
Global Forex Pros.
ABOUT THE AUTHOR: Matthew has been a trader for more than 20 years running FX desks at major banks and retail brokers. He recently started Global Forex Pros as a service for brokers to offer their clients, teaching them to trade in real time as professional traders learn at banks and institutions, giving the retail trader the confidence to trade and increasing volumes for the broker. Matthew has been a trader for more than 20 years running FX desks at major banks and retail brokers. He recently started Global Forex Pros as a service for brokers to offer their clients, teaching them to trade in real-time as professional traders learn at banks and institutions, giving the retail trader the confidence to trade and increasing volumes for the broker.
Devexperts Checks Off Type 2 SOC 2 Audit for Enhanced Data Security
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
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#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
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20-22 MAY 2024
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#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
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#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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