MO WTI – 12.10.2018
38645
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MO WTI – 12.10.2018

Long Term Overview:

Economic Analysis

American oil production continues to grow, with the EIA reporting a record production of 11.3 million barrels per day in August. Latest numbers from the weekly report indicate that the U.S. is producing even more oil now, with the latest numbers signalling that by 2019, the U.S. could be producing over 12 million barrels per day of oil. Paired with a forecast of between 1 and 1.2 million barrels per day being lost to Iran Sanctions, WTI price may continue to fall in the near term, before picking up again later in the mid – long term.

Long Term Analysis

Due to the recent uncertainties in the oil market, this has led price to decrease. Price has broken below major monthly EMAs, as well as its bullish channel; increasing the amount of resistance above price. Paired with the future forecast of American oil production set to increase, this may cause WTI to push further South and to previous lows, nearing the 43.68 area, in the next couple of weeks.

 

Decision Point: Close below previous lows nearing the 51.90 area

Long Term Trend: Short

Channel Range: 1655 (Broken out of)

Possible Bias: Short

Medium Term Analysis

Recent U.S. oil inventories have showed an increase in supply thus decreasing WTI price; America is also forecast to further increase Oil production in 2019. Price has broken below its Major Weekly EMAs as well as the Bullish Trend Line and has been Short since the beginning of October. As a result of these factors, WTI USOIL may continue to see Seller bias play out throughout the next couple of weeks and reach previous lows nearing the 49.13 area. However, do note the large scale separation on the Weekly and Bi-Weekly MacD Indicators; suggesting that price is oversold and may pullback or retrace in the near term.

 

Decision Point: Close below previous lows nearing the 51.90 area

Long Term Trend: Short

Channel Range: 1655 (Broken out of)

Possible Bias: Short