Crude Oil Price forecast for the week of March 5, 2018

Investing.com

Technical Analysis

The crude oil markets have been negative during the week, as we have broken below an uptrend line recently, and have retested it during this week, only to fail again. This is a negative sign.

Crude Oil weekly chart, March 05, 2018

WTI Crude Oil

The WTI Crude Oil market fell significantly during the week, as we have tested the previous uptrend line, but found it to be resistive as one would expect. Technically speaking, this is a very negative sign and I anticipate that oil will roll over from here. That’s not to say that it will be easy to trade this market, but I do think that there is quite a bit of negativity. I believe that if we continue to go down to the lower part of the candle, I think we will then reach towards the $50 handle. Ultimately, I have no interest in buying this market, and if the US dollar continues to strengthen, that could also put pressure on this market.

Brent

Brent markets also fell, as the uptrend line has been tested for resistance, the sellers came in and jumped all over the market. I think that the market will probably go down to the $60 level next, perhaps the $55 level after that. The market continues to be very noisy, but I think that the rising US dollar is the least of the issues. The market will continue to see concerns about the tariffs being placed in the United States, as it could spread into the petroleum markets. If that’s the case, things could get ugly really quick, driving down global demand. However, I think that at this point the biggest problem is going to be the oversupply of crude oil, which of course is the most fundamental driver.

WTI Video 05.03.18

Brent weekly chart, March 05, 2018

Crude Oil Prices – Weekly Outlook: Feb. 12 – 16

 
© Reuters. Oil prices drop nearly 10% for the week, worst loss in almost two years © Reuters. Oil prices drop nearly 10% for the week, worst loss in almost two years

Investing.com – Oil prices finished lower for a sixth straight session on Friday to tally their worst weekly loss in two years, as investors continued to fret over soaring U.S. output levels.

Steep losses in the global stock market this week and a strengthening dollar also contributed to oil’s losses.

U.S. West Texas Intermediate (WTI) crude futures for March delivery sank $1.95, or around 3.2%, to close at $59.20 a barrel. It fell to its worst level since Dec. 22 at $58.07 earlier in the session.

Meanwhile, April Brent crude futures, the benchmark for oil prices outside the U.S., tumbled $2.02, or roughly 3.1%, to settle at $62.79 a barrel, after it touched a more than nine-week low of $61.77 earlier in the day.

For the week, WTI crude lost roughly 9.6%, which was the biggest such decline since January 2016, while Brent gave up about 8.5%.

The number of oil drilling rigs jumped by 26 to 791 last week, General Electric (NYSE:GE)’s Baker Hughes energy services firm said in its closely followed report on Friday.

That marked a third straight week of increases and the largest weekly rise in more than a year, implying that further gains in domestic production are ahead.

That came after data on Wednesday showed U.S. oil production, driven by shale extraction, rose to an all-time high of 10.25 million barrels per day (bpd). That figure is above that of top exporter Saudi Arabia and within reach of Russia’s output levels.

That added to fears that rising U.S. output would dampen OPEC’s efforts to rid the market of excess supplies.

The producer group, along with some non-OPEC members led by Russia, agreed in December to extend oil output cuts until the end of 2018.

The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.

Among other energy contracts, March gasoline futures slumped 6.4 cents, or 3.6%, to end at $1.700 a gallon on Friday, with prices suffering a weekly loss of around 9.2%.

Heating oil for March edged down 6.6 cents, or 3.4%, to $1.855 a gallon, posting a weekly drop of around 9.7%.

Meanwhile, natural gas futures plunged 11.3 cents, or 4.2%, to $2.584 per million British thermal units, its lowest finish since late February 2017, for a weekly decline of 9.2%.

In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer and how fast output levels will continue to rise.

Oil traders will also focus on monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to assess global oil supply and demand levels.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday

The Organization of Petroleum Exporting Counties will publish its monthly assessment of oil markets.

Tuesday

The International Energy Agency will release its monthly report on global oil supply and demand.

Later in the day, the American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.

Wednesday

The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.

Thursday

The U.S. government will also publish a weekly report on natural gas supplies in storage.

Friday

Baker Hughes will release weekly data on the U.S. oil rig count.

US oil prices hit $50 on rising refinery demand, falling rig count

CNBC

  • U.S. Gulf refineries restarting after Hurricane Harvey
  • U.S. rig count falls to lowest since June
  • But analysts warn of distortions following hurricane damage

An oil pumpjack operates near Williston, North Dakota.

Andrew Cullen | Reuters
An oil pumpjack operates near Williston, North Dakota.

U.S. crude oil prices rose above $50 per barrel on Monday and were near last week’s multi-month highs as the number of U.S. rigs drilling for new production fell and refineries continued to restart after getting knocked out by Hurricane Harvey.

U.S. West Texas Intermediate (WTI) crude futures were trading up 41 cents, or 0.8 percent, at $50.30 by 0852 GMT, near the three-month high of $50.50 it reached last Thursday.

Brent crude futures, the benchmark for oil prices outside the United States, were at $55.91 a barrel, up 29 cents, and also not far from the near five-month high of $55.99 touched on Thursday.

“Demand forecasts from OPEC and IEA … continued to improve sentiment in the market. Refineries are also reporting a much better recovery from the recent hurricanes,” ANZ bank said on Monday.

Oil refineries across the Gulf of Mexico and the Caribbean were restarting after being shut due to hurricanes Harvey and Irma, which battered the region over the past three weeks.

Royal Dutch Shell’s Deer Park refinery in Texas was among the latest, beginning its restart on Sunday. The plant can process 325,700 barrels per day.

US oil rig counts down to 749 from a week ago

US oil rig counts down to 749 from a week ago  

The refinery restarts are occurring “as signs emerge of stalling growth in the U.S. shale industry. The number of rigs drilling for oil in the U.S. fell sharply last week,” ANZ said.

U.S. energy firms cut seven oil rigs in the week to Sept. 15, bringing the total to 749, the fewest since June, energy services company Baker Hughes said on Friday.

Despite these signs of a tightening market, analysts warned that distortions from the recent hurricanes made it hard to identify more long-lasting supply and demand fundamentals.

This week’s crude inventories data will almost certainly still show the distortions of Harvey and Irma and significant increases may be looked at by traders as outlier data,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA.

Hedge funds and other money managers cut their bullish bets on U.S. crude futures and options in the week to Sept. 12, the U.S. Commodity Futures Trading Commission reported on Friday.

Commerzbank said in a note on Monday that “speculative financial investors reduced their net long positions in WTI by 15,600 contracts,” warning that “because most of the latest price rise only happened after this, it is not yet reflected in the data.”

Crude Oil Forecast September 18, 2017, Technical Analysis

Nasdaq

Shutterstock photo

WTI Crude Oil

The WTI Crude Oil market was very volatile during the Friday trading session, but continues to struggle near the $50 handle. At this point, it’s not until we close above there on a daily chart that I would be willing to buy this market, and I think a breakdown below the $49.25 level would be a sell signal. In the meantime, it’s likely that the market will be very choppy and difficult to navigate. I’m waiting for some type of impulsivity to get involved.

Brent

Brent markets rallied after initially going sideways on Friday, using the $55 level as support. Now that we have pulled back a bit, looks like the buyers are coming back in and perhaps we should go looking towards the $56 level. A break above there census market looking for $57.50. If we were to break down below the $55 level, the market should then go down to the $54 level after that. Expect volatility, that’s what we have seen for some time.