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Crude Oil Wrap Up


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November Crude Oil tested support (50.06) on Wednesday, October 12, 2016, trading down to 49.89 and recovering to settle at 50.18 as OPEC wavers in its commitment to production cuts. As the Istanbul meeting draws to its end the OPEC secretary general Mohammed Barkindo says that OPEC hasnt decided who would make cuts first OPEC or NOPEC or at the same time. Is OPEC expecting US shale producers to join their quest for cuts? and to cut first??? OPEC came out with their estimates for production totals for September and the report showed an increase of 220k from August to 33.39 million b/d of crude oil. This is just below the IEA estimates for September. Hey Russia go ahead and cut production we are right behind you. You too USA. We really need to stabilize prices. Come on other nations lets do it. But you do it first. No.. wait... well do it at the same time. I mean seriously, we have to stabilize price. Were definitely cutting our production youll see Just go ahead and do it. The market needs it. It wants it look go ahead were going to do it right behind you. Iraq, Libya and Nigeria increased production in September and Venezuela and Iraq are disputing their production totals with OPEC. They say they are producing more than what OPEC says they are producing. Details...details The API report came out and showed an increase in crude oil inventories of 2.7 million barrels. This the first build in 6 weeks, and it was more than the expected build of between 300,000 barrels and 2 million barrels. Hurricane Matthew figured in some of the estimates. Cushing, Oklahoma saw a big decline of 1.352 million barrels; consensus was for a 100,000 barrel increase. Gasoline inventories rose by 688,000 barrels on expectations of a 900,000 barrel decline. Distillates dropped a whopping 4.517 million barrels. Hurricane related? Probably. Crude Oil declined on the report and ended the day at 50.01. The EIA report comes out Thursday morning at 10 AM CT. Resistance is still at the June high (51.67) followed by trendline resistance at 51.97. A breakout above the trendline could send Crude Oil prices toward the $55 mark. Support is at 49.36, 49.02, 48.30 and 47.37.

High 51.17

Low 49.89

Last 50.01

Daily Pivots for 10/13/16:

R2

51.64

R1

50.82

PIVOT

50.36

S1

49.54

S2

49.08


If you are interested in a Managed Futures program for Crude Oil, check out this offering from Walsh Trading:

Walsh Asset Management Introduces Bluenose Capital

For those interested I hold a weekly livestock webinar on Friday, October 14 at 2:30pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon signup.

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Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

Direct: 312.957.4163

888.391.7894

Fax: 312.256.0109

bdicostanzo@walshtrading.com

www.walshtrading.com

RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.



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About the author


Ben DiCostanzo
Senior Market Strategist
Walsh Trading

I began my career in the Securities industry working as a runner on the floor of the New York Stock Exchange while I attended Pace University. I then started working for Salomon Brothers in their Government Bond Trading arena. After graduating from Pace University with a degree in Accounting, I transferred to Chicago and became a member of the Chicago Mercantile Exchange utilizing my experience to execute trades and manage risk for institutional clients as a broker for Salomon Brothers on the trading floor. I then embarked to trade for my own account in the stock indices pits as a local before moving off the floor to aid and assist individual clients in their trading endeavors. I now work at Walsh Trading holding a series 3 broker’s license whose duties include being the firm’s Chief Market technician.

I understand that every client's needs are different, and I pride myself in tailoring my service to each client's unique circumstances and needs. Individual client experience, risk tolerance, and capital all play a role in how I approach the markets. I am involved in all markets using technical analysis to find opportunities. My approach is driven by the principles of capital preservation.

My trading philosophy is that if you can recognize and manage the risk, you have a better chance to be successful in trading. I advise clients to always use stops as money management in my opinion is the most important ingredient in trading commodities.

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