Jump to content

Crude Oil Price Rebound Emerges as US Output Holds Steady Coming into July


Recommended Posts

CRUDE OIL PRICE TALKING POINTS

The price of oil appears to be reversing course head of the 200-Day SMA ($92.62) as it holds above the April low ($92.93), and crude may stage a larger rebound over the coming days as US production holds steady at the start of July.

CRUDE OIL PRICE REBOUND EMERGES AS US OUTPUT HOLDS STEADY COMING INTO JULY

The price of oil extends the rebound from the weekly low ($95.10) even as US inventories unexpectedly increase for the first time in three weeks, and crude may attempt to retrace the decline from the monthly high ($111.45) as the Relative Strength Index (RSI) bounces back ahead of oversold territory.

Image of DailyFX Economic Calendar for US

However, indications of slowing consumption may produce headwinds for crude as US inventories jump 8.235M in the week ending July 1 versus forecasts for a 1.043M decline, and current market conditions may keep a lid on crude prices as the Organization of Petroleum Exporting Countries (OPEC) plan to “adjust upward the monthly overall production for the month of August 2022 by 0.648 mb/d.”

It remains to be seen if OPEC will retain the current production schedule over the remainder of the year amid the weakening outlook for demand, and developments coming out of the US may influence crude prices as the recent rise in oil output appears to be stalling.

Image of EIA Weekly US Field Production of Crude Oil

A deeper look at the figures from the Energy Information Administration (EIA) show weekly field production printing at 12,100K for the second week, and signs of limited supply may lead to a near-term rebound in the price of oil as it appears to be reversing course head of the 200-Day SMA ($92.62).

With that said, failure to test the April low ($92.93) may keep the price of oil within a defined range ahead of the next OPEC Ministerial Meeting on August 3, and crude may attempt to retrace the decline from the monthly high ($111.45) as the Relative Strength Index (RSI) bounces back ahead of oversold territory.

CRUDE OIL PRICE DAILY CHART

Image of Crude Oil price daily chart

Source: Trading View

  • The price of oil appears to be reversing course ahead of the 200-Day SMA ($92.62) amid the failed attempt to break/close below the Fibonacci overlap around $93.50 (61.8% retracement) to $95.30 (23.6% expansion), and crude may stage a larger rebound as long as it holds above the April low ($92.93).
  • The Relative Strength Index (RSI) highlights a similar dynamic as it bounces back ahead of oversold territory, but need a close above the $104.20 (50% expansion) region to bring the $108.10 (61.8% expansion) area back on the radar.
  • A move above the 50-Day SMA ($110.10) may push the price of oil towards the monthly high ($11.45), with the next area of interest coming in around $112.80 (161.8% expansion) to $113.70 (78.6% expansion).
  • However, failure to close above the $104.20 (50% expansion) region may keep the price of oil within a defined range as the 50-Day SMA ($110.10) no longer reflects a positive slope, with a move below $100.20 (38.2% expansion) raising the scope for another run at the overlap around $93.50 (61.8% retracement) to $95.30 (23.6% expansion).

David Song, Currency Strategist, DailyFX
Follow me on Twitter at @DavidJSong
08 July 2022

 

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
  • image.png

  • Posts

    • PG Elliott Wave Analysis Trading Lounge Daily Chart, 1 March 24 The Procter & Gamble Company, (PG) Daily Chart PG Elliott Wave Technical Analysis FUNCTION: Trend MODE: Impulse STRUCTURE: Motive POSITION: Minuette wave (ii) of {iii}. DIRECTION: Bottom in wave (ii).   DETAILS: As we are approaching ATH at 165$, we are expecting either an acceleration higher into wave (3) or else we could have topped in wave (C) to then fall back lower and continue the major correction.         PG Elliott Wave Analysis Trading Lounge 4Hr Chart, 1 March 24 The Procter & Gamble Company, (PG) 4Hr Chart PG Elliott Wave Technical Analysis FUNCTION: Counter Trend MODE: Corrective STRUCTURE: Zigzag   POSITION: Wave a of (ii).   DIRECTION: Downside into wave (ii). DETAILS: Looking for a clear three wave move into wave (ii) to finding support around the 155$ mark.   Welcome to our PG Elliott Wave Analysis Trading Lounge, your ultimate destination for detailed insights into The Procter & Gamble Company (PG) using Elliott Wave Technical Analysis. As of the Daily Chart on 1 March 24, we dive into crucial trends shaping the market.         *PG Elliott Wave Technical Analysis – Daily Chart* In terms of wave dynamics, we identify a trend function with an impulse structure, specifically a motive pattern. The current position is in Minuette wave (ii) of {iii}, indicating a potential bottom in wave (ii). With the approaching all-time high (ATH) at $165, we anticipate either an upward acceleration into wave (3) or a potential top in wave (C), followed by a downward movement to continue the major correction. *PG Elliott Wave Technical Analysis – 4Hr Chart* Here, we explore a counter trend mode with a corrective structure, specifically a zigzag pattern. The present position is in Wave a of (ii), suggesting downside movement into wave (ii). We anticipate a clear three-wave move into wave (ii), aiming to find support around the $155 mark.  
    • The new month kicked off with several stock market indices hitting record highs on Thursday. Japan's Nikkei Average, the S&P 500, and the Nasdaq all closed at fresh record peaks. The gains were buoyed by tech stocks like NVIDIA and Advanced Micro Devices. Stock markets are in an upbeat mood after US inflation figures came in line with expectations on Thursday. This helped shape forecasts for the timing of future Fed interest rate cuts. It extended the ongoing global equity rally and also pushed Treasury yields lower. The DAX also reached a new all-time high on Thursday. Europe opens today waiting for inflation data that should indicate inflation is moving back toward the 2% target. This comes after data showed inflation dropping in countries like Germany, France and Spain thanks to lower energy and food prices. The ECB has maintained record-high interest rates since September. Also on the calendar today is the US ISM manufacturing PMI.   
    • Cocoa Elliott Wave Analysis - 1 March 24 Function - Trend Mode - Impulsive Structure - Impulse Wave Position - Blue wave ‘iv’ unfolds Direction - Blue wave ‘iv’ in progress Cocoa has been a standout performer in the commodity market over the past two years, exhibiting a robust upward trend since September 2022. During this period, Cocoa prices have surged by an impressive 170%, following a discernible impulse wave pattern. Examining the daily chart, it is evident that the current rally, which commenced around the 2200 mark, is approaching its final stages. The completion of black wave 5 marked the conclusion of blue sub-wave iii at 6500. The recent downward movement indicates the emergence of blue sub-wave iv. Based on projections, blue sub-wave iv of 5 is anticipated to progress towards the significant level of 8000. A closer inspection of the sub-waves within blue wave iv reveals a potential three-wave decline, as depicted on the H4 chart. This decline from 6500 is forecasted to retrace towards the Fibonacci levels of 5489-5174. Additionally, the critical trading level of 5000 serves as another pivotal area to monitor for potential support should the ongoing dip breach the aforementioned Fibonacci zone. However, it's essential to note that the development of the wave 5 impulse pattern would be invalidated if prices were to fall below 4354. In summary, adopting a strategy of buying into the dip appears to be the most prudent approach for traders interested in Cocoa. The focus will be on purchasing opportunities towards the end of blue wave iv of 5, particularly if there's a bullish reaction observed at the identified price support levels. This analysis underscores the potential opportunities within Cocoa's current price movement and provides a framework for traders to navigate the market effectively. By incorporating Elliott Wave principles, traders can better understand the underlying market dynamics and make informed decisions to capitalize on future price movements in Cocoa. Technical Analyst : Sanmi Adeagbo          
×
×
  • Create New...
us