News & commentary on Crude Oil Futures and the Energy Futures markets including Crude Oil WTI, Crude Oil Brent, Heating Oil, Gasoline RBOB, Natural Gas & more.
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Crude Oil Futures Update is a blog dedicated to bringing updates, news and commentary on crude oil and the energy futures markets including Crude Oil WTI, Crude Oil Brent, Heating Oil, Gasoline RBOB, Ethanol and more.
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Posted on 4/18/2015 8:36:06 AM by: Matt McKinney, Market Strategist @ Zaner. 312-277-0115.
TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.
Options play: Oil rallies, despite fundamentals
How long can crude oil ignore the fundamentals of the market?
Fundamentally, oil prices should be lower. Everything I continue to read talks about more production and supply. Currently we are sitting on all-time record supplies here in the U.S. I read we are sitting on the lowest supplies in 80 years. Whats the difference 80 years or "all-time"? I'm not even sure if we had the capacity to store over 480 million barrels of oil 80 years ago. Also, the Energy Information Agency (EIA) report that hits the wire service every Wednesday morning at 9:30 a.m. Chicago time has shown a build in inventories for at least the 12 straight weeks this past Wednesday.
There are no producers in the world including the great Fracker's here in the U.S. nor OPEC who are even considering cutting back production. Everyone wants their market share of the oil market. Now that also includes Russia, Canada, Texas, and soon Iran. A deal I hear is in the making for the nuclear weapon's sanctions to be lifted in Iran. That will be roughly another 2 million barrels per day added to the all-time record high glut.
As I tell me clients and prospects if crude oil was really trading on the true fundamentals of the market, meaning the true supply and demand, I believe the price would be at around $25/barrel. However, I also explain that I am not foolish enough to think the big boys, big traders, and big money will allow for it. My outlook for crude oil prices for the July, August, and September futures in the coming weeks could go as low as $35-$40/barrel. Despite all of this we have seen the crude market rally about $13/barrel over the last 3 weeks or so. I had a client tell me that, "the market can stay irrational longer than you can stay solvent".
Technically, on the chart below I have placed my favorite technical indicators. They are the 9 day Simple Moving Average (SMA, red line), the 20 day Simple Moving Average (SMA, green line), and the 50 day Simple Moving Average (SMA, blue line). I have also added the Bollinger Bands (BB's, yellow lines) and Candlesticks (red and green bars), each bar represents one day of trading on the daily chart, one week of trading on the weekly chart, and one month of trading on the monthly chart.
On the daily chart below the June crude market is in what I refer to as a "PRINCIPAL TREND" up. This is a term I have coined that determines the strongest form of a trend that a market can be in according to my favorite technicals, whether up or down. In this case it's up. In order for this "PRINCIPAL TREND" up to take place first I need the 9 day SMA (red line) to point up on a fairly sharp angle. Next I need the 9 day SMA to cross up and over the 20 day SMA (green line). Then I need the 20 day SMA to also point up on a fairly sharp angle. As the 9 day SMA has crossed up and over the 20 day SMA and both indicators are pointing up together on fairly sharp angles and the price of the crude is using the 9 day SMA as the first area of support and is trading above the it then the "PRINCIPAL TREND" up is in full effect.
Daily June crude oil chart
Technically, on the monthly crude oil chart below, I have a "PRINCIPAL-TREND" down. This is the longer term view of the market in my opinion simply because it's a monthly chart. A chart where each bar represents a month of trading. Just the opposite of the daily chart above.
On the monthly chart below the crude market is in what I refer to as a "PRINCIPAL TREND" down. In this case it's down. In order for this "PRINCIPAL TREND" down to take place first I need the 9 period SMA (red line) to point down on a fairly sharp angle. Next I need the 9 period SMA to cross down and under the 20 period SMA (green line). Then I need the 20 period SMA to also point down on a fairly sharp angle. As the 9 period SMA has crossed down and under the 20 period SMA and both indicators are pointing down together on fairly sharp angles and the price of the crude is using the 9 period SMA as the first area of resistance and is trading below the 9 day then the "PRINCIPAL TREND" down is in full effect. This is the case below on the monthly chart.
Monthly crude chart
For exact details on other types of risk, months, expiration dates, strike prices, and number of positions feel free to contact me at 312-277-0115 or firstname.lastname@example.org. In addition, I am by no means "married" to the silver market. I like to make trade recommendations to my clients in the direction of the existing trend whether the market be the precious metals, currencies, financials, softs, grains and more.
FREE QUOTE- "Fortune favors the bold." -Guiness
FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERDLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STICKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT OPTIONS PRICES MAY ONLY MOVE A LITTLE.
THE LIMITED RISK CHARACTERISTIC OF OPTIONS REFERS TO LONG OPTIONS ONLY AND REFERS TO THE AMOUNT OF THE LOSS, WHICH IS DEFINED AS THE PREMIUM PAID ON THE OPTION(S) PLUS COMMISSIONS.
Posted on 4/17/2015 11:20:50 AM by: Larry Baer, Market Strategist @ Zaner. 312-277-0112.
Posted on 4/14/2015 2:38:09 PM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.
EIA GAS STORAGE
Higher close for the crude and heating oil along with the rbob and natural gas but not as good as it seems. Yes, the energy complex ralled sharply from its session's lows but the closes were just okay. In fact, the energy complex had a decent selloff from the pit's close making their settlement prices look better than the last prices on the electronic close. However, there were no new contract lows made today which could still lead to higher prices in the short term. I am not smart enough to tell you when energies will bottom out at this time.. Natural gas also had a nice rally off its lows while in its nearest resistance area at this time. SELL SIGNALS FOR CRUDE AND HEATING OIL ALONG WITH THE RBOB AND NATURAL GAS. CALL FOR DETAILS! For additional charts, quotes, news, commentary & more, sign-up for a FREE 30-day trial to Market head.Com
Posted on 4/14/2015 2:38:01 PM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.
Posted on 4/8/2015 6:07:02 AM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.
Posted on 4/6/2015 1:33:16 PM by: Larry Baer, Market Strategist @ Zaner. 312-277-0112.
Markets: Energies, CME Group (CME), New York Mercantile Exchange (NYMEX), Crude Oil WTI (CL), Crude Oil Brent (CB), Heating Oil (HO), Gasoline RBOB (RB), Natural Gas (NG), Ethanol (ZK)
Futures, options and off-exchange retail foreign currency ("forex") trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. Past performance is not necessarily indicative of future results.