Short term
Trade view / 03 August 2016 at 12:21 GMT

Oil not looking so slick

Managing Partner / Spotlight Group
United Kingdom

Oil prices are having a struggle down near April lows in European trading on Wednesday and so are still trapped in bear market territory. The investment community is looking ahead for fresh weekly information on US stockpiles of crude and refined products.

The US Energy Information Administration (EIA) will release its weekly report on oil supplies at 15:30 BST or 10:30AM ET Wednesday with expectations for a drop of 1.4 Million barrels. Gasoline inventories are expected to decline by 200,000 barrels while stocks of distillates, which include heating oil and diesel, are forecast to fall by 482,000 barrels.

After markets closed on Tuesday, the American Petroleum Institute (API) said that US oil inventories fell by 1.3 Million barrels in the week ended July 29. It also showed a decline of 450,000 barrels in gasoline stocks. For distillate inventories including diesel, API reported an increase of 539,000 barrels.
 Source: Spotlight Ideas        

The chart above shows that spot broke beneath the 50 day moving average (dma) on July 5 and has now broken under the 200 dma and is testing he level that was last seen on August 26 2015.

The technical picture is mixed as measures from one minute to one hour suggest that WTI is a “Strong Buy”. However, longer measures from five hours to one month are the polar opposite as a “Strong Sell”.

I am looking to sell WTI ahead of the data on a short-term play.

WTI 10-Year Chart:
Source: Spotlight Ideas

Management and risk:

Parameters: WTI September 2016 (CLU6) USD / Barrel
Entry: Sell 39.88 13:04 BST
Targets: 38.33 ... 35.06 ... 34.00
Stop: 43.50
Time horizon: Short-Term

— Edited by Clemens Bomsdorf

Non-independent investment research disclaimer applies. Read more
04 August
Feders Feders
Hello!, this trade idea still in place?. I made a bear put spread with it but yesterday rally left me full of questions!
04 August
Stephen Pope Stephen Pope
I am still involved.
04 August
Stephen Pope Stephen Pope
The technicals in the very short-term still have a positive spin...that evaporates as on moves to a daily perspective.
04 August
Feders Feders
Thanks Stephen.


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