Thursday, April 30, 2015
Crude Oil Continues to Bottom. Could be time to buy soon.
Although there is no magic in the 30-week simple moving average, there must be some kind of bottom in place for a price to cross over this moving average from below. The price of USO fell below its 30-week moving average last July and has remained there for the nine months since. But now the indicator has moved down below $22, while the price closed today around $20.50. I expect to see the price of USO cross back over its 30-week average in a few weeks. When this technical event occurs, it might be a better time to buy crude oil than it has been for quite some time.
Wednesday, April 15, 2015
Crude Oil Inventories Number Moves Market Again
The market was expecting an increase of 3.5 million barrels of oil inventories this morning, but the Energy Information Administration revealed a smaller increase of 1.3 million barrels at 9:30 CDT. This was bullish for the price of crude. Within 10 minutes of the news release, the price increased by $1.25 a barrel. The price continues higher and at 10:36 is trading $2 higher for the day.
This weekly report is getting a lot of attention these days, and moves the market. Please make a note of it.
Wednesday, April 08, 2015
Crude Inventories and the Tentative Bottom
Analysts were
expecting an increase of 3.3 million barrels of oil this week, but according to
the Energy Information Administration release at 9:30 central time:
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 10.9 million barrels from the previous week. At 482.4 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years.
As
a result of this supply side surprise, the price of crude oil quickly
fell by one dollar a barrel to $52.88, a drop of 4%. Since then, the
price has continued a bit lower.
Oil
had rallied the first two days of this week from $50 to $55, a gain of
10%. The price remains above the 50-day moving average price of $49.07
for several days now. This is the first time the price has held above
the 50-day moving average since oil prices began falling last summer.
Stan
Weinstein, a market technician I remember from the early 1980s when I
was working in Beverly Hills, would probably caution against buying oil
until the price crosses above the 30-week moving average. This could take awhile
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