Author Topic: WTI Crude Oil  (Read 2948 times)

Kaitsu

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WTI Crude Oil
« on: September 20, 2019, 07:45:32 PM »
Oil prices remained steady today after the dramatic start to the week with the attacks of the Saudi Arabian Abqaiq oil facilities. Iran stands accused of the attacks.

Both the US and Iran have stated that they do not want a war, but tension in the region is still high and WTI still carries a risk premium.
Ships are safe in harbour - but that is not what ships are for......

Kaitsu

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Re: WTI Crude Oil
« Reply #1 on: September 21, 2019, 07:52:23 AM »
Even though both the US and Saudi Arabia dismiss the claims of the Iran-backed Houthis in the Yemen that they even carried out the attacks on SA, the Houthis are now offering a deal where they will discontinue these attacks if Saudi Arabia stops its airstrikes over Yemen.

Bearing in mind earlier attacks on tankers in the Hormuz and the impounding of oil/cargo tankers by both the UK and Iran, the geopolitical risks in this area are increasing as well as the scale of these attacks.

When viewed against a background of shrinking global economies and ample oil inventories, which are bearish factors on oil prices, it is difficult to assess a premium to reflect these geopolitical risks.

It is hard to identify a longer term trend for oil prices and trading might be more prosperous on a shorter term timeframe.

Ships are safe in harbour - but that is not what ships are for......

Kaitsu

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Re: WTI Crude Oil
« Reply #2 on: September 21, 2019, 10:05:26 AM »
The US is sending a "moderate" number of troops and missile defence weaponry to Saudi Arabia to bolster its defences against further attacks.

Although both Iran and the US state that they are not seeking war, the rhetoric is still aggressive and the risks are still present.

Whilst sending military resources helps to control the continuation of oil supplies it does not resolve the situation.
Ships are safe in harbour - but that is not what ships are for......

Magyar

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Re: WTI Crude Oil
« Reply #3 on: September 21, 2019, 10:30:29 AM »
The US response to this highlights further itís reluctance to criticise the Saudis over the murder of the journalist in Turkey by the Saudis

Kaitsu

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Re: WTI Crude Oil
« Reply #4 on: September 22, 2019, 10:39:32 AM »
The US response to this highlights further itís reluctance to criticise the Saudis over the murder of the journalist in Turkey by the Saudis

I think you are right there.

It seems to be a fact that no matter how outrageous or atrocious an event is, people quickly forget and it disappears into history. Even when the price of such an act (like Crimea) is hard sanctions, it is never very long before they start to break down.

The perpetrators will take a chance that as the public outrage quickly fades so the governments concerned will move their focus onto the missed business opportunities instead.

Ships are safe in harbour - but that is not what ships are for......

Kaitsu

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Re: WTI Crude Oil
« Reply #5 on: September 23, 2019, 07:51:32 AM »
Middle East tensions have not dispersed over the weekend and WTI is still retaining a risk premium. In this chart the marker MA's have crossed to the upside and price is above the marker 200 SMA.

But trade negotiation news and rhetoric is also likely in the run up to the high-level October US-China trade talks.

Whilst longer term the outlook for oil prices is weak, I would not like to short these markets with the risk of sudden spikes to the upside on sensitive news.

« Last Edit: September 23, 2019, 07:54:23 AM by Emerson »
Ships are safe in harbour - but that is not what ships are for......

eddieb

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Re: WTI Crude Oil
« Reply #6 on: September 23, 2019, 08:00:11 AM »
I've always thought that you need deep pockets and patience to trade oil. Price is so volatile and, as it affects every car owner, it's politically hyper-sensitive.
Disclaimer. Posts are just my thoughts,  not recommendations.  Do your own due diligence before trading

Kaitsu

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Re: WTI Crude Oil
« Reply #7 on: September 23, 2019, 08:41:31 AM »
I've always thought that you need deep pockets and patience to trade oil. Price is so volatile and, as it affects every car owner, it's politically hyper-sensitive.

Professionals and serious retail oil traders are mainly trading futures with all the back months and looking at cantangos and backwardation issues, etc, and that does require capital.

But many quality retail forex brokers also offer oil as a CFD contract, alongside their other CFD offerings. These are usually based only on the current front month futures contract and are offered in units as low as microlots. But oil, like indices can move fast and far and therefore can still represent a big risk and potential even with small lot sizes.

Crude oil is used primarily for fuels, but a lot of that fuel is used in industry and industrial transportation and not just for private cars, so economic demand factors, as well as supply factors, weigh heavily on the price.

I am not sure what affects consumer petrol prices the most, crude oil price or the taxation policies of the national government in the country concerned.

Ships are safe in harbour - but that is not what ships are for......

Kaitsu

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Re: WTI Crude Oil
« Reply #8 on: September 24, 2019, 06:56:53 AM »
Not much new here and yesterday was a quiet, consolidatory day.

The main issues are still the negative effect of weakening global economies, the geo-political risk in the Middle East, and the tensions between Iran and the US and the EU countries, mainly Germany, France and the UK. A lot of threats and a lot of talk about new negotiations of nuclear treaties, etc.
Ships are safe in harbour - but that is not what ships are for......

Caesar

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Re: WTI Crude Oil
« Reply #9 on: October 01, 2019, 06:42:53 AM »
The Saudi comments yesterday were clearly designed to encourage the US to take action against Iran, something they would likely have to do unilaterally since not all their traditional allies are taking the same approach against Iran as America.
Trump doesn't seem over keen on starting a war, despite all the rhetoric.  I don't think he wants the blood of US soldiers on his hands.
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Caesar

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Re: WTI Crude Oil
« Reply #10 on: October 08, 2019, 08:44:17 AM »
From this mornings Market Pulse

CRUDE OIL prices are hovering near 2-month lows after West Texas Intermediate (WTI) suffered the biggest weekly loss since July last week as US data showed larger-than-expected increases in inventories. Dimming hopes for any major announcement of a US-China trade deal this week are keeping prices under a bit of pressure, though they are showing some stability at lower levels.

In an effort to support prices, Nigeria announced yesterday that it and other OPEC members were ready to trim production further. Speculative investors scaled back net long positions for a third week in the week to October 1, reducing net longs to the lowest in more than a month.

 
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Kaitsu

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Re: WTI Crude Oil
« Reply #11 on: October 14, 2019, 08:33:57 AM »
Whilst oil is one of my trading "portfolio" interests, I haven't been involved in it for some time now. The reasons being that it has recently been driven mainly by a) global slowing of economic growth (demand, i.e. trade indices instead!), b) unreliable inventory data (supply, boring weekly figures), c) geo-political events (totally unpredicable).

I just felt I couldn't get a comfortable grip on direction, which has been a source of some frustration. So I found some solace in this article entitled: "Hedge Funds Hammered In Ultra-Volatile Oil Markets"

"Hedge funds arenít exactly batting 1,000 these days. And when it comes to their energy bets, itís largely been a crash-and-burn story. This year is threatening to deliver more of the same.

Despite recovering investor risk sentiment, hedge fund managers were in the red for the second consecutive month in September, dragging down their year-to-date return to 5.81 percent and underperforming the global equities market, which gained 2.04 percent over the month.

Since 2016, energy-exposed funds have gotten hammered by wrong-way bets on oil and gas, sparking a wave of closures in 2018. They just canít seem to get it right, because todayís world isnít yesterdayís world: Shellshocked on oil for the past few years, now, even things like ominous Middle East tensions that promise to spark WWIII arenít enough to move the needle on oil for more than a day. "


Read more here:

https://oilprice.com/Energy/Energy-General/Hedge-Funds-Hammered-In-Ultra-Volatile-Oil-Markets.html

I don't see the prospects for oil direction clarifying any time soon, so this commodity is  on the shelf as far as my trading goes at present.

 
Ships are safe in harbour - but that is not what ships are for......

Caesar

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Re: WTI Crude Oil
« Reply #12 on: October 15, 2019, 09:05:54 AM »
OPEC Secretary General Mohammed Barkindo said OPEC and other oil producers remained commited to maintain oil market stability beyond 2020 despite bearish signs of demand growth.

OPEC, Russia and their allies have not ruled out deeper oil output cuts when they next meet December 5-6 in Vienna, the organization's secretary general said on October 10, even as its analysis arm revised upward its forecasts of demand for the group's crude this year and the next.
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Caesar

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Re: WTI Crude Oil
« Reply #13 on: October 17, 2019, 07:43:48 AM »
WTI is at the lower end of a descending triangle and has tested resistance.  Failure to break through this may suggest a rise back up to $57-$58.

However,  sma100 and 200 suggest breaking below resistance is probable and higher stock levels reported in the US would support that.

So, take your pick.  Price will either go up or go down, unless of course it goes sideways.  :-\
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Kim

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Re: WTI Crude Oil
« Reply #14 on: October 21, 2019, 03:18:43 PM »
Emerson, do you only look at wti or do you also look at Brent?  I noticed today that Brent is testing 57.50 area again. Do you think it might break through or will it bounce again?