Market Direction: BULLISH alert
issued 11/10/2016
Is oil an issue going forward this year?
Oil
prices settled to their lowest level in about a month Wednesday after data
showed that U.S. crude stockpiles unexpectedly climbed for the first time in
nine weeks.
July
West Texas Intermediate crude CLN7, -0.07% fell $2.47, or 5.1%, to settle
at $45.72 a barrel on the New York Mercantile Exchange—the lowest finish for a
most-active contract since May 4, according to FactSet data. The Nymex
settlement was later than usual on Wednesday, with a CME spokesman citing a
“technical issue that delayed dissemination” of the WTI settlement prices.
August
Brent crude LCOQ7, -0.04% on the ICE Futures Europe
exchange shed $2.06, or 4.1%, to $48.06 a barrel. That was the lowest finish
for a most-active Brent contract since late November.
Early
Wednesday, the U.S. Energy Information Administration reported that domestic crude supplies rose by 3.3
million barrels for the week ended June 2. The unexpected rise followed eight
consecutive weeks of declines.
The
American Petroleum Institute late Tuesday had
reported a drop of 4.6 million barrels, while analysts polled by S&P Global
Platts forecast a fall of 3.5 million barrels.
“A
combination of a drop in refinery runs, rising imports and a shifting of crude
from the [Strategic Petroleum Reserve] into commercial inventories, has yielded
a surprise build to crude inventories,” said Matt Smith, director of commodity
research at ClipperData. “Despite the drop in refining activity, lower implied
demand for the products has meant we have seen a full house of bearish builds.”
Gasoline
stockpiles also climbed by 3.3 million barrels, while distillate stockpiles
were up 4.4 million barrels last week, according to the EIA.
On
Nymex, July gasoline RBN7, -0.25% fell 6.3 cents, or 4.1%, to
$1.491 a gallon, while July heating oil HON7, +0.10% lost 5 cents, or 3.4%, to
$1.416 a gallon. Both products finished at their lowest levels since early May.
Meanwhile,
natural-gas futures fell after a 2% gain a day earlier, as the market braced
for weekly U.S. supply data Thursday. July natural gas NGN17, +0.63% ended at $3.02 per million
British thermal units, down 2.2 cents, or 0.7%.
Crude
production last week edged lower, with total output down 24,000 barrels a day
to 9.318 million barrels, the EIA data Wednesday showed.
However,
in a monthly report issued Tuesday, the EIA said it expects U.S. crude production in 2018
to average 10 million barrels a day, exceeding the previous annual record of 9.6
million barrels a day in 1970.
Strong
production out of the U.S. has been the main challenge facing the Organization
of the Petroleum Exporting Countries, which together with a handful of
non-cartel producers such as Russia, have pledged to reduce their output by 1.8
million barrels through March.
OPEC’s
own rising production has also weighed on prices. Despite the reported high
level of compliance to the cut deal, the cartel’s output likely rose by 270,000
barrels a day in May to 32.12 million, according to S&P Global Platts.
Meanwhile
in the Middle East, investors continued to keep an eye on the diplomatic rift
between Qatar and neighboring Persian Gulf countries.
$tockMarketDirection proprietary model is currently BULLISH. We strongly encourage you to monitor
positions closely, exercise proper money management strategies and follow us at $tockMarketDirection for ALERTS we
may issue advising a change in the current market direction. Stay tuned
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The all-time highs since our initial
recommendation to go LONG
this market. Here is how the markets have performed:
Stock Market
Direction Recommendation (11/10/2016)
|
||
Dow
|
up 2,417.16 points a 12.85% gain
|
6/2/17
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Nasdaq
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up 1,101.82 points a 21.15% gain
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6/5/17
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S&P 500
|
up 272.75 points a 12.58% gain
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6/2/17
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Related Link: http://www.stockmarket-direction.com/
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