Jump to content

Crude Oil Prices May Rise on NFPs after OPEC+ Meeting Boosted WTI to Resistance


Recommended Posts

CRUDE OIL, WTI, OPEC+, EIA, NFPS, TECHNICAL ANALYSIS, IG CLIENT SENTIMENT - TALKING POINTS:

  • WTI crude oil prices rallied overnight to reverse deep intraday losses
  • OPEC+ output hike doubts, EIA inventories & sentiment were factors
  • Oil may rise on NFPs next as retail trader bets offer bullish outlook

Oil settles mixed on questions over crude supply, demand, strong dollar

Crude oil prices rallied 2.4% on Thursday, reversing earlier losses in the session. In fact, if you measure it from the low, WTI rallied over 5.5% into the close, marking a notable intraday reversal. There were a couple of fundamental dynamics aiding energy prices. The first is the aftermath of this week’s OPEC+ meeting.

WTI rallied despite OPEC+ agreeing to increase daily output by 648k barrels per day starting in July from 432k anticipated prior, meaning more supply. This comes amid potential supply gaps as the west sanctions Russia over its attack on Ukraine. Moreover, prices likely rallied because investors doubt that the group can commit to these goals as most of the countries will likely struggle to meet higher production targets.

Later in the session, the Energy Information Administration (EIA) released weekly stockpile data. Crude oil inventories unexpectedly fell by 5.07 million barrels. That was much worse than the -1.1 million contraction seen, indicating a tightening supply. Meanwhile, improving risk appetitive likely bolstered sentiment-linked oil prices. The S&P 500 rallied 1.84% on Thursday.

Over the remaining 24 hours, WTI will be closely watching May’s US non-farm payrolls report. The world’s largest economy is expected to add 320k jobs, down from 428k in April. Recent data suggest that NFPs could surprise lower, perhaps weakening hawkish Federal Reserve policy expectations. If that is the case, and sentiment continues improving, then it stands to reason that WTI could follow higher.

CRUDE OIL TECHNICAL ANALYSIS – DAILY CHART

On the daily chart, WTI is attempting to breach the key 116.61 – 116.64 resistance zone. There was a false breakout in late May, and since then the commodity has been consolidating around that range. A confirmatory upside push could open the door at uptrend resumption, placing the focus on March highs (124.76 – 129.41). Otherwise, a turn lower exposes the rising trendline from December.

Crude Oil Prices May Rise on NFPs after OPEC+ Meeting Boosted WTI to Resistance

Chart Created Using TradingView

CRUDE OIL SENTIMENT ANALYSIS - BULLISH

Taking a look at IG Client Sentiment (IGCS), about 34% of retail traders are net-long. Since IGCS tends to function as a contrarian indicator, this hints that prices may continue rising. Downside exposure has increased by 23.82% and 7.61% compared to yesterday and last week respectively. With that in mind, this is offering a stronger bullish contrarian trading bias.

Crude Oil Prices May Rise on NFPs after OPEC+ Meeting Boosted WTI to Resistance

IGCS Chart Pulled from June 2nd report

 

Jun 3, 2022 | DailyFX
Daniel Dubrovsky, Strategist

  • Great! 1
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      22,086
    • Total Posts
      92,935
    • Total Members
      42,475
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    IPS Temp Admin
    Joined 06/10/22 15:40
  • Posts

    • Commodity Markets: Forex, Bonds, US Gold, Silver, Iron Ore,Copper Lithium,Nickel, Crude Oil, Natural Gas. Elliott Wave   Commodities Market Summary: The USD DXY USDJPY are heading higher into Wave iii) and iv) corrections so are the FX pairs and so are GDX and US Spot Gold. So, there are no larger trends, just corrections.   Trading Strategies: No strategies as markets are in small corrective patterns.   Video Chapters 00:00 US Gov Bonds 10 Yr Yields 00:44 US Dollar Index DXY USDJPY, EURUSD, AUDUSD 05:50 US Spot Gold / GDX ETF 08:41 US Spot Silver 11:20 US Copper / Lithium / Nickel / Iron Ore 19:01 Crude Oil 21:21 Natural Gas 27:11 End   Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817   Source: tradinglounge com Access Trial here... buy 1 month Get 3 months              
    • Hi @AndaIG, Please could the [LOUP] Innovator Deepwater Frontier Tech ETF be listed and made available for the ISA tax wrapper, pretty please? Many thanks, Sam
    • Look ahead to 31/5/23: China PMI; France GDP; Germany CPI Economic data is key on Wednesday. It starts in Japan with retail sales, followed by Chinese PMI.  Jeremy Naylor | Analyst, London | Publication date: Tuesday 30 May 2023  IGTV’s Jeremy Naylor looks at the chances that the Chinese yuan will weaken further as it becomes more and more obvious that the recovery in China is further away than initially expected. Then in the eurozone we’re looking at the CAC 40 and DAX as growth and inflation data is released. The only corporate on the schedule is from stationers, WH Smith.          
×
×
  • Create New...