Growing US Supplies Continue to Limit Oil’s Upside from OPEC Cuts

Growing US Supplies Continue to Limit Oil’s Upside from OPEC Cuts

Fundamental Forecast for USOIL: Bullish

  • Front-Month WTI Continuing To Struggle Near 19-Month Closing High, APF Resistance
  • Technical Post: Crude Oil Price Forecast: WTI Within 1XATR Of 2017 Highs On OPEC News
  • U.S. Crude Inventories At Highest Level Since Oct 1930
  • See a DailyFX Economic Calendar to find what live coverage for pivotal eventuality risk conversion FX and Energy markets is scheduled for a entrance days on a DailyFX Webinar Calendar.

Where will a Crude Oil go in a initial entertain of 2017? Get a foresee here!

The Oil marketplace finds itself in a singular mark of a commodity landscape of Q117. Two of a largest tellurian suppliers, a United States Shale Oil Producers and a Organization of Petroleum Exporting Countries (OPEC) are trending in opposite directions while a cost seems to have stalled nearby a 2017 Opening Range high.

Regarding US Production, on Friday, a Baker Hughes US Oil supply count surfaced 600 for a initial time given 2015. The arise in U.S. prolongation can be seen by a weekly Department of Energy Data that has seen a pointy arise and can be seen on a draft subsequent that has a front-month Crude Oil agreement cost overlaid.

Growing US Supplies Continue to Limit Oil’s Upside from OPEC Cuts

Data Source Bloomberg

In contrariety to a pointy arise in a prolongation of Shale Oil in a US, we have seen OPEC correspondence with their settle to change a supply and direct imbalance. The draft subsequent captures a dump in OPEC prolongation that is approaching to final by August.

This tug-of-war of perplexing to change a marketplace has a cost stranded in a middle. We continue to see US Rigs per a Baker Hughes Rig Count come onto a marketplace so a application of cost sensitivity could continue. Fortunately for a Bulls with a longer-term horizon, a reduce sensitivity has aligned with an uptrend.

Growing US Supplies Continue to Limit Oil’s Upside from OPEC Cuts

Data Source: Bloomberg

Technical View:

The draft subsequent should be enlivening to a Bulls notwithstanding US prolongation increase, generally a studious ones as we demeanour to have found a new and aloft cost building that is highlighted on a draft above. In further to a viewed aloft cost support, a cost of WTI traded above a 2017 Opening Range high of $55.21 on a shutting basis. Crude Oil’s attempt to dermatitis from a 2-month cost range should reason traders attention.

The draft shows a miss of sensitivity in a Bullish environment, that for many Bulls, is only how they wish a marketplace behaving. Low sensitivity in an uptrend is what we’ve seen for many of a SP’s ancestral rise. Therefore, low sensitivity in and of itself should not be a reason for Bears to burst in and take Oil to or subsequent expected cost support.

Growing US Supplies Continue to Limit Oil’s Upside from OPEC Cuts

Next Week’s Data Points That May Affect Energy:

The focal points for a appetite marketplace subsequent week will sojourn Wednesday’s EIA Petroleum Supply Report during 10:30 AM ET and Friday’s Baker-Hughes Rig Count during 1:00 PM ET.

Happy Trading!

-T.Y.

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