crude steady as doe oil stocks build lower than api estimate 2686702017

Crude oil prices have been on a roller-coaster ride to absolutely nowhere in recent weeks. It appears as though the buying and selling pressure in finely balanced. Bullish speculators are encouraged to remain in the game because of the OPEC’s efforts to reduce supply. Bearish traders are encouraged by signs of renewed rise in oil production in the US. Here, rig counts and oil inventories have been rising sharply in recent weeks. Indeed, according to the US Department of Energy, crude stockpiles rose by a further 9.5 million barrels in the week ending February 10. This was higher than the build of 3.7 million barrels expected, but slightly lower than the American Petroleum Institute’s (API) estimate of 9.9 million barrels published last night. As a result, oil prices didn’t move much in response as they were already on the retreat in reaction to the API data. So, the uncertainty continues and ranges will likely dominate the agenda. I still think that oil prices will likely rise further to new 2017 highs in the near-term outlook, than, say, drop by 5 bucks.

Given the lack of volatility in recent weeks, it helps if we don’t focus too much on static noise and instead concentrate on the bigger picture. So, as can be seen on the weekly chart, WTI continues to make higher highs and higher lows and remains somewhat comfortably above the pivotal $50/51 range, which had been resistance in the past. Thus the path of least resistance on the higher time frame is still to the upside and will remain so until the chart says otherwise. Last week’s long-legged doji candle highlights the lack of willingness from the sellers to hold onto their positions. If WTI were to break above the $54.30 resistance level this time, then it may stage a more meaningful rally. After all, the multi-week consolidation has allowed the short-term oscillators to unwind from “overbought” levels through time rather than price, which is technically very bullish.

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.