Rule:
Crude Oil is considered the king of the commodities
markets. The Strategic Petroleum Reserve
is the United States' emergency oil stockpile, and it is the
largest emergency petroleum supply in the world. The reserve stores
about 570 million barrels of crude oil in underground salt caverns
at four sites along the Gulf of Mexico. Any dipping into this
reserve is going to be big news.
Brent Crude
is traded in London as something called Futures contracts, which
are priced in US Dollars. Now, all you traders brave enough to run
your positions over a period of days or weeks, pay attention here:
Oil spread bets are monthly contracts. This means that:
a) You don't pay any rollover charges; the bet will run until the
contract ends;
b) Now, get this, the spread bet runs out (contract expires) in the
middle of the month before the month it says on the tin. So, for
example, the Brent Crude August contract runs out (expires) on 14th
July. How dumb is that?
What to watch when trading
trading oil involves keeping an eye on a few different factors to
the standard investment stuff. In addition to the run of the mill
economic data that will gives clues as to whether the world's
factories are burning more or less oil there're a couple of
seasonal factors:
First, courtesy of Top Gear, there's the
US Driving Season
Now switch over to the weather forecast to see how windy it is.
The
US Hurricane Season
officially runs from 1st June to 30th November, but don't expect
the forces of nature to pay too much attention to the dates.
Hurricanes tend to hit the Gulf of Mexico, which is filled to the
rafters with oilrigs (over 20 rigs went missing due to Hurricane
Katrina in 2005).
Notice the
seasonal rise in the oil price
during the hurricane season.
And finally
the most specific economic data to focus on
are the US weekly oil and gas inventory figures, issued by the
Energy Information Administration and released every week on
Wednesday afternoons. If you trade oil you can't afford to miss
these.
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Historical:
High:
114.57
Low:
76.84
Analysis and Recommendation:
Crude Oil
is holding at 106.68. On the week,
oil declined 2.8%
, snapping a three-week string of gains that included a 6% advance
the previous week. he contract climbed above $110 a barrel Thursday
on a report from an Iranian state-run broadcaster - later denied -
of a pipeline explosion in Saudi Arabia
Fears of potential supply disruptions have dominated the market,
and the report, however lacking in details and corroboration from
other news outlets, was enough to send jittery investors into a
buying frenzy.
The "erroneous report" was enough to swing whole markets because
"what mattered was the fear we had of a supply disruption in Saudi
Arabia. Now that fear is removed."
Investors also weighed news President Barack Obama will speak on
U.S.-Israeli relations and Iran's nuclear program in the
weekend.
Obama is scheduled to meet with Israel's Prime Minister Benjamin
Netanyahu on Monday at the White House.
Western sanctions on Iran to force it to discuss its nuclear
program have been the main sore point in the oil world recently.
Iran contends it seeks nuclear capabilities for peaceful purposes,
but Western countries view it as a weapons program.
Oil should continue to settle this week although it will remain
close to the 106.00 range.
Only Good News from the US:
Existing home sales
US existing home sales picked up unexpectedly in January, but the
previous figures were downwardly revised.
Initial jobless claims
US initial jobless claims stayed unchanged in the week ending
February the 18th, while the consensus was looking for an
increase.
University of Michigan consumer confidence
The final figure of Michigan consumer confidence for February
showed a strong upward, revision from 72.5 to 75.3, while only a
minor one was expected.
New home sales
After increasing for four consecutive months, US new home sales
dropped at the start of 2012.
Federal Reserve Chairman Bernanke
testified before the Senate, this week, the markets found his
comments a bit dovish and drew conclusions that any additional QA
was off the table for the time being. Although the Chairman warned
that the economy was recovering, he stated it was fragile and he
was still worried about jobs. Gold soared on his comments.
Economic Events: (
GMT
)
WEEKLY
Crude Oil Pivot Points (Time Frame: 1 Day)
| Name |
S3 |
S2 |
S1 |
Pivot |
R1 |
R2 |
R3 |
|
Classic
|
102.500 |
104.165 |
105.370 |
107.035 |
108.240 |
109.905 |
111.110 |
|
Fibonacci
|
104.165 |
105.261 |
105.939 |
107.035 |
108.131 |
108.809 |
109.905 |
|
Camarilla
|
105.786 |
106.049 |
106.312 |
107.035 |
106.838 |
107.101 |
107.364 |
|
Woodie's
|
- |
104.050 |
105.140 |
106.920 |
108.010 |
109.790 |
- |
|
DeMark's
|
- |
- |
107.638 |
106.734 |
104.768 |
- |
- |