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Crude Oil Futures

Commodity trading is not suitable for everyone. The risk of loss in trading can be substantial. This material has been prepared by a sales or trading employee or agent of Van Commodities, Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Van Commodities, Inc. Research Department. Please view our Risk Disclaimer.  

Free in-depth analysis of the Crude Oil futures market written by a professional Crude Oil trader.

July 20, 2014

Crude Oil Futures Brokerage, Van Commodities, Inc.

The September Crude Oil Future (CLU14) at the Chicago Mercantile Exchange (CME) saw a reversal week to the upside, after a three week of sell. The roughly seven percent selloff that took the contract from an intraday high on June 25 at 106.65 to the 98.68 intraday low on July 15 involved large speculators liquidating about eighteen percent of their long position.

 The rally which started early in the US trading session on Tuesday was reinforced on Wednesday, July 16 when a larger than expected 7.5 million barrel draw down in US inventories was reported by the Energy Information Agency (EIA). Although the drawdown was larger than expected the US domestic market remains well supplied, with overall crude inventories at the top end of its five year average range for this time of year.

The market continued to receive bullish news throughout the week from geopolitical concerns with the Malaysian Airline shoot down over the Ukraine and renewed violence between Israel and Hamas in the Gaza strip. CLU14 continues to trade in a roughly seventeen dollar range between ninety and one hundred seven dollars.

 

May 26, 2013

Crude Oil Futures Broker, Van Commodities, Inc.

The Crude Oil future (CLN13) closed down roughly two percent on the back of investor concerns about high US crude oil supplies. Concerns about a weaker than expected Chinese Purchasing Managers Index (PMI), indicating a contraction in China’s manufacturing sector and uncertainty about the Federal Reserve’s future commitment to Quantitative Easing.

Coming into last Monday CLN13 was overbought based on several short term momentum indicators. The key reversal on the July weekly continuation chart indicates the possibility for continued weakness over the near term for CLN13. Initial resistance may come in at 94.81-95.42, with further resistance at 96.10. Initial support may come in at 90.60-91.80, with stronger support at 89.00.

 

May 07, 2013

Crude Oil Futures Trader, Van Commodities, Inc.

The Crude Oil contract (CLM13), basis the weekly continuation chart, continues to trade within the contracting trading range that has contained price for the past two years. Energy traders will be looking for the Energy Information Administration (EIA) weekly petroleum status report tomorrow at 10:30 EST, for price direction. Trader’s expectations are for a build in crude inventories of 1.75-1.90 million barrels. A further build would continue to add crude oil to the approximately three hundred ninety- five million barrels of inventory already in place, an amount that stands roughly ten percent above the five year average for this time of year. Fundamentally the US domestic market is very well supplied with crude oil.

Although the main item on the agenda for petroleum and product traders tomorrow is the EIA report, energy markets are always vulnerable to geopolitical shocks. Market participants were reminded of geopolitical risk yesterday when traders reacted to news of Israeli missile strikes in Syria over the weekend. CLM13 traded in a roughly two and half percent range, intraday, before closing with a marginal gain from Friday’s settlement.

CLM13 is becoming overbought based on several short term momentum indicators. Initial resistance may come in at 95.85-97.50, with further resistance at 98.22-100.30.

For aggressive traders initial support may appear at 93.00-94.10, with stronger support 90.20-92.00.

 

March 7, 2013

Crude Oil Futures Broker, Van Commodities, Inc.

The Crude Oil Future (CLJ13) continues to trade in its ever tightening range. The closing price today, basis the weekly continuation chart at 91.55, is the middle of the larger range created with the high price of 146.86 in the week of July 14, 2008 and the low price post the Financial Crash at 37.12 in the week of February 16, 2009. The tighter range formed by the symmetrical triangle is roughly 85.00-100.00.

 

Yesterday’s inventory data, reported by the Energy Information Administration (EIA), showed a build in inventories above market expectations. The US domestic market is well supplied and inventories stand about twelve percent higher than the five year average. Barring a geopolitical issue unfolding, the upside on CLJ13 appears to be somewhat limited.

 

Over the past three weeks CLJ13 traded down roughly nine and half percent; resulting in an oversold condition based on several short term momentum indicators. The contract pierced a trend line drawn on a daily chart just below 90.00 over a three day period including yesterday, but the trend line has held so far. The contract was able to close midrange yesterday, even with the bearish EIA data, and CLJ13 was able to push higher today. Support for CLJ13 may come in at 89.00-90.00, with strong support at 85.00. Initial resistance may come in at 92.00-93.18, with stronger resistance at 94.00-95.00. 

January 20, 2013

Crude Oil Trader, Van Commodities, Inc.

The crude oil future (CLH13) continues to tighten the range it has traded within since April 29, 2011, when it hit an intraday high of 110.47. The US market is well supplied with crude oil and the most recent EIA report, released on January 16, showed domestic inventories at approximately 356 million barrels, roughly eleven percent above the five year average.

 

During the week, CLH13 continued to trade to the upside on firm US and Chinese economic data. News of a terrorist attack on an energy installation in Algeria may have also lent support to the commodity. Although geopolitical concerns have been on the backburner for several months, the potential for dislocations in the global supply line of crude are always in the back of energy trader’s minds.

 

Next week’s economic calendar for the US should not be of much concern for CLH13 traders. Data of interest for energy traders will include MARKIT Purchasing Managers Indices (PMI) released January 24, giving a perspective of the global manufacturing sector. Energy traders will look to the data for an indication about the overall strength of the International economy.

 

CLH13 is overbought based on both short and intermediate term momentum indicators. The inside day on Friday may indicate that the commodity is losing some of its upside momentum and further fundamental news may be needed for traders to push price in one direction or other. Initial resistance may come in at 96.50-98.00 and increased selling pressure at 98.66-99.30. On a short term basis initial support may come in at 92.59-94.00 with stronger support at 90.75-91.30.

Oil Futures Broker, November 4, 2012

West Texas Intermediate (WTI), basis the weekly futures chart, has been trading in a huge range over the past four and a half years with a high of 147.27 in July 2008 and a low January 2009 at 33.20,  a couple of months after the Lehman Financial meltdown. Ninety dollars a barrel would be the middle of the range and the December futures (CLZ12) closed at 84.86 Friday November 02, 2012, down 2.23 from Thursday’s close.

Over the past year price action has contracted the range forming a triangle with price levels of 77.50-110.00.

 

Earlier this year nervousness over geopolitics in the Middle East pushed energy prices to the highs for the year in March. Since that time OPEC has continued to keep Global markets well supplied, with Iraq and Saudi Arabia making up for the reduction of Iran’s supply and concerns over slowing global growth has helped to undermine prices. At the same time US domestic production has continued to boom, keeping domestic inventories well above the five year average by about 40 million barrels for the week ending October 26, 2012.

 

CLZ12 is technically oversold based on several short and intermediate term momentum studies, but for the moment it would appear the bears have control of the market. If the risk off trade in general continues next week, CLZ12 could have further to go on the downside. Over the near term initial support comes in at 82.26-83.65 followed by 81.10-78.50. Initial resistance comes in at 87.50-89.10 followed by 90.50-92.75.

Crude Oil Futures Broker, April 26, 2012

Since the April 23, 2012 intraday low crude oil futures, basis the June futures contract (CLM12), traded to an intraday high today at 104.92 and closed at 104.12. Although the crude oil inventory numbers reported yesterday were 42 percent higher than the market expected; CLM12 traded up on the back of a weaker dollar, a slightly more positive outlook for economic growth announced by the Federal Reserve at the conclusion of their FOMC meeting yesterday and a mix of US economic today showing stronger home sales, which offset the higher unemployment claims numbers. It was also reported yesterday that officials are considering a Russian proposal to avert additional sanctions against Iran in an attempt to resolve the controversy over Iran's nuclear program.

CLM12 appears to be in a range of 101.70-106.20 and susceptible to news on the Iranian nuclear controversy. If it appears that Iran and the P5+1 nations can reach a deal over Iran's nuclear program CLM12 could fall to 97.00 rapidly, as the International markets appear to be well supplied with crude. On the other hand if it appears that Iran is stalling the negotiations and a deal cannot be attained CLM12 could trade towards 111.00 just as fast.

February 22, 2012

Energy Trader, Van Commodities, Inc.

The West Texas Intermediate Crude Oil contract (WTI), basis May, has rallied roughly $10 since February 02, 2012 to an intraday high of $107.20, before closing at 106.50 today. Part of the upward move has been due to the risk of the trade coming back into favor with stronger US economic data releases over the last several weeks and reduced fears over a meltdown in the Greek debt situation. Nervousness resulting from Iran’s increased bellicosity, in reaction to further economic sanctions being applied by Western Nations over Iran’s alleged pursuit to weaponize its growing nuclear capability, has also led to upward pressure on the oil markets. 

Data released today, regarding both China and the Euro-Region’s purchasing manager’s indices, signal the potential for continued weakening of these two economic areas. In conjunction with this economic data the WTI crude contract, basis May, is technically somewhat overbought based upon several momentum indicators. A third factor which may have pulled oil prices down today was that a few U.S. House Democrats stated President Obama should release crude from the Strategic Petroleum Reserve to stem rising gasoline prices. 

These three factors may have played a role in the weaker close for the WTI contract February 22, 2012 at 106.50, after making an intraday high of 107.20. These prices are the highest level for the May WTI crude contract since May of 2011, when crude was on its way down. The market may stall for a bit or even pullback towards 104, but the overall technical profile of the marker is favorable and with all the tensions in the Middle East the market looks well supported. The breakout above 104 and yesterday's close above 105.80 should enable crude to move towards the 115 area and a further move towards 118 appears possible.

Commodity trading is not suitable for everyone. The risk of loss in trading can be substantial. This material has been prepared by a sales or trading employee or agent of Van Commodities, Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Van Commodities, Inc. Research Department. Please view our Risk Disclaimer.

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