WTI Bullish Ahead Of Weekly Inventories
Fall seasonality be damned, WTI prices are on the bull. Today has brought significant bids to December WTI crude oil futures, generating an intraday high of $57.42 (at press time, 1:15 PM EST). At this point, it appears energy traders are ignoring the potential of strong weekly inventories reports and are going long crude.
Due to the observance of Veteran’s Day last Monday, the U.S. crude oil inventories reports are to be released one day later than usual. The API numbers are scheduled for later this afternoon, while the EIA is due to wrap up the weekly figures Thursday at 11:00 AM EST. Here is a quick look at what the markets are expecting:
Event Projected Previous
API Crude Oil Stocks NA 4.26M
EIA Crude Oil Stocks 1.600M 7.929M
Typically, growing supplies equate to lagging oil pricing. This was not the case last week as traders largely ignored the growing stocks numbers and drove December WTI futures to a proximity test of $58.00. This week’s figures are expected to drop from those of last week; if they do, be on the lookout for more bids to hit the WTI market.
December WTI Futures Ignoring Seasonal Trends
For now, it looks like optimism over trade and OPEC production cuts are bringing energy bidders to the table. Subsequently, prices of December WTI futures have broken above resistance on the weekly chart and are in position to make a legitimate run at $60.00.
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Overview: The weekly chart above gives us two key pieces of information. First, the Weekly SMA has crossed over the Bollinger MP. This is a bullish signal and one that last occurred in June, ahead of a $5.00+ runup. Second, there is a defined area of support present from the Weekly SMA ($56.35) to the Bollinger MP ($56.13). As long as price is above this area, it is a good idea to respect the upside of the market.
While a correction is somewhat likely before the onset of December, WTI crude continues to hold its ground. This is a far cry from last year, when prices fell quickly from $73.00 in October to $45.00 in late-December. Although the bearish action of Fall/Winter 2018 is not what we are seeing, the potential for a sweep lower in the near-term is very real.
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