WTI oil eases as refineries processed less crude

WTI oil eases as refineries processed less crude

Following the publication of the weekly EIA oil inventories report, WTI crude prices initially fell. The headline drawdown of 5.73 million barrels in US crude stockpiles for the week ending October 13 was not as great as 7.1 million reported by the API the day before. In addition, stocks of gasoline and distillates rose by 1.91 and 0.52 million barrels respectively, with the latter missing expectations of a 1.5 million barrel drawdown. But crude oil production slumped, presumably because of the impact of the recent hurricanes. Refineries meanwhile operated at only 84.5% of their operable capacity. This was the lowest seasonally-adjusted refinery utilization rate since 2011, pointing to weaker demand.

Overall though the oil report was mixed, so I think there is a good possibility oil prices will bounce back as the focus returns to the OPEC and ongoing concerns over supply restrictions in the Kurdish region of Iraq. The OPEC’s ongoing efforts with a few non-OPEC countries such as Russia to reduce global crude stocks is working and the market is rapidly tightening. That’s according to BP’s chief executive Bob Dudley. “Stock levels are just heading down, for both crude and products. So it does seem we’re heading towards the targets that were set by OPEC.”

Meanwhile, from a technical standpoint, the chart of WTI continues to paint a bullish picture. This is highlighted among other things by a series of higher lows, the break of a downtrend and by price moving above key moving averages. As the slope of the long-term 50- and 200-day moving averages are also starting to turn positive, this is objectively telling us that oil prices are no longer in a long-term downtrend. In the short-term, WTI faces resistance around the $52.30 level, where it has struggled on numerous occasions in recent times. With the underlying trend being bullish, I think it may be a matter of time before WTI clears this hurdle. If and when it breaks away from this level, then we could see the onset of another rally towards the Fibonacci extension levels at $53.80/5 (127.2%) and $55.10/20 (161.8%), with the latter also being the January high. While the bullish outlook wouldn’t materially change until and unless WTI creates a lower low below $49.10, we would nonetheless turn cautious on our bullish view in the event price breaks below the $51.10-$51.40 short-term support range.

About the Author

Fawad Razaqzada is market analyst at FOREX.com and City Index brands of Gain Capital.

New Bitcoin All-Time Highs, the Ethereum Hard Fork, and the Slow March to $6,000

New Bitcoin All-Time Highs, the Ethereum Hard Fork, and the Slow March to $6,000

Despite the massive run-up in price, the psychological level of $6,000 was not breached, and the BitStamp all-time high presently sits at $5,846.43. The same can be said for BitFinex’s BTC/USD pairing, which now has a new $5,920 all-time high, serving as a final pre-breakout resistance level. We have a similar situation with Kraken’s XBT/EUR pair, €5,000 was not shattered, and the all-time high is currently holding at €4,899.

Yesterday’s reversal was immensely painful for margin traders. Needless to say, altcoins have continued to crater, and have even in some cases, secured new all-time lows. The ethereum Byzantium Hard Fork has also come to pass without any issues, but the positive resolution has not had a sizable effect on the price, at least not as of yet. Bitcoin cash has oscillated around $300 in the meantime, with the price being close to $315 at the time of writing.

The bitcoin fork appears to stirring up a lot of controversy, with certain sources stating that there is practically no support for bitcoin gold. This equally applies to exchanges as well as wallets providers, and the project might be running into a few technical difficulties, which could explain the lacking support.

As to whether bitcoin is in a bubble and/or near the top, there are many conflicting opinions on the matter, although it should be obvious to anyone who has even remotely glanced at the charts.

Jamie Dimon, with his endless slurry of quotes on bitcoin, is regularly referenced across social media, and mainstream media as well, which rarely miss an opportunity to cite him for their wider audience. Regardless, hourly volume has sustained on the majority of bitcoin centric exchanges, and waiting a few more days in order to gauge overall sentiment, would probably be a wiser course of action.

Media news outlets in South Korea have reported that Bithumb, the world’s largest cryptocurrency exchange by trading volume, suffered a security breach that ended up affecting 30,000 users on the trading platform. Government agencies have considerably ramped up their efforts, with Seoul’s Metropolitan Police Agency and the Central Prosecutor’s Office for Advanced Criminal Investigation, leading the investigation and taking point on resolving the controversy regarding the situation.

Tweets by BithumbExchange

The previous week saw a huge 28.74% rise from bitcoin’s $4,541 weekly low, which began on October 9 (GMT 06:00). The breakout concluded at the $5,846.43 all-time high, which was realized on October 13 (GMT 03:00), thus ending the huge $1,305.21 upswing in price. Since then, trading has remained in a range between yesterday’s $5,383 daily low, and the $5,846.43 all-time high, which has not been broken thus far.

If you have any questions and comments on bitcoin today, use the form below to reply.

Gold rally extending overnight

Gold rally extending overnight

A daily summary of high-profile members of several complexes.

Gold Dec Contract (GC, ETF: (GLD))
Despite Thursday having held the test of Tuesday’s 1286.50 high, the rally extended overnight and Friday morning probed fresh highs up to 1300.00. Rather than react down, that was extended higher intraday to probe 1305.00 and to all but suggest the bottom had completed already.

Eurodollar Dec Contract (EC, ETF: (FXE, UUP))
Blipping-down on Friday morning’s data barely attacked the 1.1830 pullback limit. and was reversed up to a fresh high for the current correctioN. The balance of the session drifted back down, not triggering a sell signal, but undermining potential up to 1.1970.

Silver Dec Contract (SI, ETF: (SLV))
Fresh highs overnight extended higher Friday morning, positioned to close a dime above 17.30and reverse the trend back up officially.

30-year Treasury Dec Contract (US, ETF: (TLT))
Thursday’s close above 152-20 and 153-02 was exploited by surging in reaction to Friday morning’s econ reports. That was extended nearly 1 point to probe above 1540-04 Closing above 153-14 is the final confirmation that the trend has reversed back up, making a corrective dip down to 151-18,

Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s gap down had originated from a position of strength, which was proved by an overnight rally that probed above Wednesday’s prior high. Intraday action settled back to test prior support, but the recovery attempt remains valid.

Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Extending the corrective bounce overnight attacked its 3.04 potential objective to within 1 cent. Its reaction down tested what had recently been a buy signal.

About the Author

Rod David develops analytical techniques that are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He primarily analyzes S&Ps, generating several round-turn candidates daily. Rod publishes “Trading Plan” and more each session at the blog http://IfThenSignals.com.

Weekly High Cleared, Possible New Bitcoin Rally Once the €4,000 Resistance is Shattered

Weekly High Cleared, Possible New Bitcoin Rally Once the €4,000 Resistance is Shattered

A new rally appears to be underway, and considering how poorly altcoins have performed this weekend, it might end up being a substantial leg up in price. The $4,679.97 monthly high is our near-term target, which is incidentally, almost €4,000 at the current exchange rate, and is serving as a psychological barrier that is holding back further growth.

This is right on cue, as the bitcoin cash community is having an elongated debate on removing the Emergency Difficulty Adjustment safeguard feature from their network protocol. Bitcoin gold is also drawing in some minor headlines, a recent article delved into more detail on how to prepare for the October fork.

Morgan Stanley’s CEO, James P. Gorman, has begun calling bitcoin more than a fad, praising the first crypto currency in a somewhat similar fashion to Goldman Sachs former VP, Matthew Goetz. Announcements from current and former high ranking banking officials, will probably be prevalent until the months end, presumably from other top US bank executives and administrators as well.

China and its regulators are prominent in the media too, with fresh articles primarily revealing more information on licensing issues, and how it will specifically pertain to local bitcoin exchanges.

Singapore has taken a different stance though, and has decided to only regulate fintech businesses, not crypto currencies and assets in general. Mr. Tharman Shanmugaratnam, Singapore’s Deputy Prime Minister, Coordinating Minister for Economic and Social Policies, and Chairman of Singapore’s financial watchdog, the Monetary Authority of Singapore, answered questions on government policy relating to crypto currencies, the technicalities and minutia of it all was covered in a new Bitcoin News article.

BitFlyer, a Japanese bitcoin exchange, has released a new bitcoin prepaid card, offering its user base additional benefits and perks in regards to fiat conversion. Japan looks to be on the forefront of new financial services, at least according to a new article from bitcoin.com. This is in stark contrast to the latest announcement from CryptoPay, which has disabled newly issued and shipped contactless prepaid cards, and has as of late, garnered a lot of hate in the community.

Tweets by cryptopay

Taiwan seems to be taking a slightly friendlier stance to crypto regulation, and could begin to attract companies from China and other parts of the globe, with Taiwan’s FSC chairman opposing heavy handed crypto currency regulation.

Bitcoin has steadily risen since the October 5 $4,137.96 weekly low (GMT 06:00), and after breaking through the previous $4,137.96 weekly high today (GMT 01:00), is poised to shatter the $4,679.97 monthly high, either in the next few days or possibly even sooner.

If you have any questions and comments on bitcoin today, use the form below to reply.

Gold turns positive as dollar heads lower post NFP

Gold turns positive as dollar heads lower post NFP

Gold turned positive after initially dropping to its lowest level since August 8 in reaction to a weaker-than-expected U.S. jobs report. The dollar’s initial gains evaporated as market participants made a more sober assessment of the jobs report and realized that the sharp rise in average hourly earnings may have been driven by a sizeable drop in low-paid and hurricane-hit jobs rather than an actual rise in earnings. As the dollar fell, buck-denominated precious metals went up in value. Their ascend took a boost by a rare fall in U.S. stock indices, as some investors booked healthy profit ahead of the long weekend.

U.S. employment fell by 33,000 last month as jobs in food services and drinking hubs were hit hard due to the impact of hurricanes Harvey and Irma. But it wasn’t all doom and gloom, as average hourly earnings grew more than expected, with the year-over-year rate climbing to 2.9% from 2.7% in the previous month. The economic calendar looks quite quiet for the most part of next week, until Friday. There’s very little on the agenda on Monday, which is not a big surprise as there are holidays in Japan, U.S. and Canada. Tuesday will see the release of official manufacturing data from the UK, France and Italy. The FOMC’s last meeting minutes will be published on Wednesday, followed U.S. PPI and crude oil inventories a day later. Friday will likely be the most important day of the week in terms of data as we will have the latest U.S. CPI and retail sales, among a couple of other macro numbers. In addition, there will be several speeches from various Fed members to look out for.

Thus, the dollar will remain in focus again next week. After Friday’s disappointing jobs data, the inflation figures, in particular, better be at least in line with the expectations, otherwise, the dollar could ease further next week. As well as the prospects of weaker U.S. dollar, gold may find additional support from ongoing situation in Catalonia region of Spain, where the Catalan leader is reportedly set to declare independence on Tuesday. The uncertainty could weigh on European stocks, although the impact could be short-lived as the Brexit vote proved last year. In any case, it is worth following the developments there closely.

As a result of the post-NFP rebound, gold was in the process of potentially forming bullish reversal formation on its daily chart. However, the day was not over when this report was written and there was still plenty of time left for the market to make up its mind. Despite gold’s rebound, it is still far too early to suggest that we have seen the low. But it is in the process of forming a hammer daily candlestick formation off of its 61.8% Fibonacci retracement support level, which cannot be ignored. Still, a sustainable break back above the $1,276/7 resistance level is still required if gold was to rise towards $1,300 again.

About the Author

Fawad Razaqzada is market analyst at FOREX.com and City Index brands of Gain Capital.

Bitcoin Dancing Toward $4,500, the IMF, European Banks, and the Wolf of Wall Street

Bitcoin Dancing Toward $4,500, the IMF, European Banks, and the Wolf of Wall Street

We are returning back to the fold with bitcoin, which was until recently, steadily encroaching $4,500. A few prior trend lines have been nullified, primarily due to the latest drop to the currently standing $4,217.84 daily low. The $3,850.61 weekly low is also not that far off as well, and if existing conditions endure, and in the best case improve, prior supports should fend off the bears and allow the ascending trend to continue further. The more immediate resistance levels are at the $4,453 weekly high, the $4,700 monthly high, and finally at the record breaking $4,979.9 all-time high.

Christine Lagarde, Managing Director of the International Monetary Fund, discussed bitcoin and other crypto currencies in a recent article. Other broader themes were touched upon in further detail too, with an especially interesting section dedicated to artificial intelligence, and it how it pertains to future worldwide employment.

The mainstream media on the other hand, has persisted and kept to Goldman Sachs, bombarding the internet with an endless barrage of articles, citing that the firm is going to be delving into bitcoin trading in a rather big way. This includes sources such as Bloomberg, Forbes, Business Insider, the Wall Street Journal, CNBC, and Cointelegraph to name just a few. Regardless, the news appears to have been denounced as false, and we might have to wait a bit longer, before bitcoin trading starts to reach a much wider audience.

According to the South China Post, European banks have begun to discuss a “utility settlement coin” that would facilitate the trading of securities.

Jordan Belfort, of Wolf of Wall Street fame, has gone on record talking about how bitcoin is a bubble, specifying that artificial scarcity is the main reason for the surge in price.

Even so, many are calling for higher prices, Max Keiser being one of them. Although there are voices questioning today’s slow-down as well, such as Lisa Froelings from the Cointelegraph.

In the meantime, bitcoin’s market dominance has held steady, with around 50% of the total crypto market being taken up by the first crypto currency, the remainder is of course spread out among altcoins.

The Japanese market might start leading in trading volume again, partly due to the substantial strain and pressure, emanating from regulatory agencies in China and other countries. The immense capital flight from the affected countries, has become even more evident and obvious in the past few days.

However, with this year drawing to an end, there is still enough time to rescue the situation, bringing about circumstances that should hopefully propel the scene further, come next year. It would be a shame for it all to end abruptly or slow to a halt, considering how invigorating and transformative fintech has been so far.

Bitcoin began trading from $4,329 on October 1 (GMT 00:01), and after a brief run-up, the $4453 weekly high was achieved on October 2 (GMT 11:00). The price has since then fallen slightly, and after touching today’s $4,217.84 low on October 3 (GMT 14:00), rebounded above $4,300.

If you have any questions and comments on bitcoin today, use the form below to reply.

Will crude oil drop under $50 in the coming week?

Will crude oil drop under $50 in the coming week?

Although the price of black gold increased a bit on Friday, the commodity closed the whole week below important resistance lines and invalidated earlier breakouts. What does it mean for crude oil?

Crude oil’s technical picture

Let’s take a closer look at the charts below and find out.

On Friday, we wrote that the first thing that catches the eye on the medium-term chart is an invalidation of the breakout above the long-term green resistance line. Additionally, thanks to yesterday’s drop the commodity slipped under the previously broken May peak (marked with the blue horizontal dashed line), invalidating the earlier tiny breakout, which is a negative development. Nevertheless, these events will turn bearish if we see a weekly closure below them later in the day.

From today’s point of view, we see that the commodity closed the previous week under the long-term green resistance line, invalidating earlier breakouts and giving oil bears an important reason to act in the coming week.

How did this drop affect the very short-term chart? Let’s check.

On the daily chart, we see that although crude oil moved a bit higher on Friday, the size of the rebound was small compared to Thursday’s pullback. Additionally, it materialized on visibly lower volume than the earlier decline, which increases doubts about oil bulls’ strength and a further rally.

On top of that, crude oil closed another session and the whole week below the recent highs and the previously broken lower border of the purple rising trend channel, which together with the sell signals generated by the CCI and the Stochastic Oscillator suggests further deterioration in the coming week.

How low could crude oil go?

If this is the case and crude oil declines from current levels, the initial downside target for oil bears will be around $49.85, where the previously broken red declining line (which serves as the nearest support) is. If it’s broken, we’ll likely see a drop to the 38.2% Fibonacci retracement based on the June-September upward move (around $48.72) in the following days.

Finishing today’s alert please note that Friday the Baker Hughes report showed that the number of oil rigs rose by six to 750 after declining for four of the previous five weeks. In our opinion, this is a negative signal, which will likely increase concerns that U.S. oil output could rebound and push the price of light crude lower in the coming days. This pro-bearish scenario is also reinforced by news that OPEC crude oil output increased in the previous month because of higher supplies from Iraq and Libya. Therefore, we believe that short positions continue to be justified from the risk/reward perspective.

Summing up, short positions continue to be justified from the risk/reward perspective as the combination of the technical (invalidation of breakouts, higher volume during declines, sell signals generated by the indicators) and the fundamental pictures (an increase in the number of oil rigs, higher production from Iraq and Libya) of the commodity suggest lower prices in the coming week.

About the Author