WTI and Brent crude oil closed sharply higher last week mostly in reaction to a bullish report from the International Energy Agency . The data in the weekly EIA inventories report is still irregular because of Hurricane Harvey and the number of oil rigs dropped last week.
November WTI crude oil closed the week at $50.44, up $2.38 or +4.95% and December Brent crude oil closed at $55.42, up $1.84 or +3.43%.
WTI Crude Oil Non-Commercial Speculator Positions:
Large speculators reduced their bullish net positions in the WTI Crude Oil futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.
The non-commercial futures contracts of WTI Crude Oil futures, traded by large speculators and hedge funds, totalled a net position of 374,480 contracts in the data reported through Tuesday, September 12th. This was a weekly reduction of -7,633 contracts from the previous week which had a total of 382,113 net contracts.
WTI crude oil speculative bullish positions have now fallen lower for five out of the past six weeks and remain below the +400,000 net contract position for a third straight week.
WTI Crude Oil Commercial Positions:
The commercial traders’ position, categorized by the CFTC as hedgers or traders engaged in buying and selling for business purposes, totalled a net position of -379,315 contracts on the week. This was a weekly boost of 9,414 contracts from the total net of -388,729 contracts reported the previous week.
IEA Looking for Demand to Accelerate
According to the IEA, global oil demand is set to accelerate faster than anticipated this year. Strong second-quarter demand has buoyed oil markets, which have been struggling to rebalance as a supply glut has weighed heavily on prices, the IEA said in its September report released on September 13.
The raw data in the IEA report strongly indicated that a rebalancing of the market is underway. The IEA increased its growth estimate for the year to 1.6 mb/d, or 1.7 percent. For 2018, the IEA is predicting growth of 1.4 mb/d, or 1.4 percent.
In August, the IEA has anticipated annual growth would hit 1.5 mb/d, again an increase on July’s 1.4 mb/d forecast.
Traders know that the EIA report was a hurricane-altered report so I believe last week’s rally was primarily fueled by trader reaction to the IEA’s bullish outlook.
With IEA saying the global oil glut was shrinking thanks to strong European and U.S. demand, as well as production declines in OPEC and non-OPEC countries, we think the groundwork has been laid for higher prices, however, investors haven’t decided if they prefer to buy dips or buy strength.
WTI Crude Oil Forecast Technicals
Crude Oil closed the week above Moving Averages of 200 Days. This was an important technical sign of the Bullish movement. 50.45 is an important Fibonacci Support level which was tested on Thursday. This level must be broken first to move higher.
The first target above 50.45 is 51.20 – 51.70 zone. 53.20 and finally 54.90 ( the highest of the year ) will be targeted by the Bulls.
Below the current level, 49.50 and 48.80 are the weekly supports.
For the first day of the week, our main strategy will be to use POSSIBLE pullbacks towards 49.60 and 49.00 as a buying opportunity and reduce the LONG positions around 50.20-50.40 levels. We will add LONG positions as soon as price makes hourly closings above 50.50.
November WTI crude oil closed the week at $50.44, up $2.38 or +4.95% and December Brent crude oil closed at $55.42, up $1.84 or +3.43%.
WTI Crude Oil Non-Commercial Speculator Positions:
Large speculators reduced their bullish net positions in the WTI Crude Oil futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.
The non-commercial futures contracts of WTI Crude Oil futures, traded by large speculators and hedge funds, totalled a net position of 374,480 contracts in the data reported through Tuesday, September 12th. This was a weekly reduction of -7,633 contracts from the previous week which had a total of 382,113 net contracts.
WTI crude oil speculative bullish positions have now fallen lower for five out of the past six weeks and remain below the +400,000 net contract position for a third straight week.
WTI Crude Oil Commercial Positions:
The commercial traders’ position, categorized by the CFTC as hedgers or traders engaged in buying and selling for business purposes, totalled a net position of -379,315 contracts on the week. This was a weekly boost of 9,414 contracts from the total net of -388,729 contracts reported the previous week.
IEA Looking for Demand to Accelerate
According to the IEA, global oil demand is set to accelerate faster than anticipated this year. Strong second-quarter demand has buoyed oil markets, which have been struggling to rebalance as a supply glut has weighed heavily on prices, the IEA said in its September report released on September 13.
The raw data in the IEA report strongly indicated that a rebalancing of the market is underway. The IEA increased its growth estimate for the year to 1.6 mb/d, or 1.7 percent. For 2018, the IEA is predicting growth of 1.4 mb/d, or 1.4 percent.
In August, the IEA has anticipated annual growth would hit 1.5 mb/d, again an increase on July’s 1.4 mb/d forecast.
Traders know that the EIA report was a hurricane-altered report so I believe last week’s rally was primarily fueled by trader reaction to the IEA’s bullish outlook.
With IEA saying the global oil glut was shrinking thanks to strong European and U.S. demand, as well as production declines in OPEC and non-OPEC countries, we think the groundwork has been laid for higher prices, however, investors haven’t decided if they prefer to buy dips or buy strength.
WTI Crude Oil Forecast Technicals
Crude Oil closed the week above Moving Averages of 200 Days. This was an important technical sign of the Bullish movement. 50.45 is an important Fibonacci Support level which was tested on Thursday. This level must be broken first to move higher.
The first target above 50.45 is 51.20 – 51.70 zone. 53.20 and finally 54.90 ( the highest of the year ) will be targeted by the Bulls.
Below the current level, 49.50 and 48.80 are the weekly supports.
For the first day of the week, our main strategy will be to use POSSIBLE pullbacks towards 49.60 and 49.00 as a buying opportunity and reduce the LONG positions around 50.20-50.40 levels. We will add LONG positions as soon as price makes hourly closings above 50.50.
