Commodities

Crude Oil Analysis Report 5-3-19…Is More Downside Ahead???

Oil prices fell as much as 4% on Thursday, breaking through a key support level, as rising U.S. crude stockpiles helped offset concerns about a supply crunch.

Crude futures declined despite a wave of geopolitical concerns, including political turmoil in Venezuela and the launch of new American measures aimed at driving Iran’s crude exports to zero.

The drop was partly due to the overhang from Wednesday’s weekly report on U.S. crude stockpiles, which showed inventories surging by 9.9 million barrels. The data also showed U.S. oil production ticking up to a record 12.3 million barrels per day.

U.S. crude stockpiles have risen in five of the last six weeks, helping to ease the market’s concern that global oil supplies are getting tight.

Reports that Asian refineries are asking Saudi Arabia for more crude oil are also weighing on prices, said Kilduff. Any sign that the Saudis will answer those calls will push prices lower, he said.

President Donald Trump is largely relying on Saudi Arabia to fill the gap left by Iranian supplies. Saudi Arabia has not explicitly committed to hiking output, but says it will respond to the market’s needs.

Source

Wow, there is so much going on with oil right now, I think the news would even make an algometric trading program’s head spin.   Really, how should one decipher oil’s next move when the news implies tighter supply, then supply contraints, lets go to the charts to find out.

Big Picture

Little Picture

Price did hit the lower daily supply within the weekly supply before pulling back. However, price has since breached the uptrend line and the daily demand at $62.25. Thus, the up trend as been terminated.

Thus, the levels in play now on the 4 hr chart are the $60.60 and $65 level. A drop below $60.60 and price will head lower. A move to the $65 level will cap the short term up movement.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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