Previous Trading Day Summary
On Tuesday, December 1, the WTI oil contract (CLx – January 16) closed with the following parameters:
- High price for the trading day (H) = 42.23 (-0.38*)
- Low price for the trading day (L) = 41.17 (-0.33*)
- Closing price of the day (C) = 41.85 (+0.20*)
- Official closing price of CL (December 15) = 40.39 (+1.46*)
(* – compared to the previous day, dollars per barrel).
The session for the January 2016 WTI futures contract showed limited intraday volatility.
Expectations for the upcoming OPEC ministers’ meeting continue to limit market participants’ trading activity. Statements and opinions from officials of the cartel countries indicate that the summit discussion will be quite intense.
The data on weekly crude oil inventories in the US from API (actual/expected):
- API Weekly Crude Oil Stock: 1.600M vs -1.200M
The data came out worse than average market expectations, but better than the data from the previous week of 2.600M.
- ISM manufacturing activity index in the USA 48.60 against expectations of 50.5.
- Total car sales in the USA 7.81M against 8.01M.
- Truck/commercial vehicle sales 18.19M against expectations of 18.00M.
- Canada’s GDP m/m -0.5% against expectations of 0.1%.
During the day, FOMC officials spoke. The rhetoric of statements indicates that the regulator is considering the possibility of raising the interest rate. However, it is noted that the decision will be made based on incoming economic data. Previously, the regulator changed the rules for emergency lending, which indirectly may indicate that no shocks from a potential change in the interest rate policy are expected.
The situation in the Middle East remains tense, with an increase in uncertainty regarding the decline and localization of conflicts.
Germany approved the decision to participate in the coalition operation against ISIS. The US sends a contingent of special units for operations.
The escalation of tensions between Turkey and Russia is gaining momentum. The Russian leadership is imposing economic sanctions on Turkey. The countries exchange rather sharp statements about the development of the conflict. In particular, it was stated that Russia is suspending the consideration and implementation of investment projects in the oil and gas and energy sectors with Turkey.
The Russian leadership continues to implement restrictive measures against Turkey. Turkey, in turn, begins to look for alternative gas supply sources, considers and implements measures to support its economy.
It should be noted that Turkey controls shipping through the Bosporus and is one of the main nodes for the transportation of crude oil and petroleum products.
The Turkish Navy conducts large-scale exercises in the strait area.
News Background Affecting Oil Prices on December 2, 2015
The news background during the day for the oil market includes the release of data on weekly crude oil and petroleum product inventories in the US from EIA. Data and news received during the day will be considered in the context of the current state and assessments of future demand prospects. FORTRADER experts draw your attention to the release of labor market data in the US, producer price indices and consumer price indices in the Eurozone, Australia’s trade balance, and China’s services PMI. Representatives of the FOMC speak during the day.
Support, Resistance, and Pivot Point Levels for WTI Oil Today, December 2, 2015
Resistance Levels (January 16):
- R3 = 43.24
- R2 = 42.73
- R1 = 42.19
Middle Line:
- PP = 41.68
Support Levels:
- S1 = 41.14
- S2 = 40.63
- S3 = 40.09
Summary of Open Positions on December 1, 2015
No positions for buying or selling oil were opened during the working hours.
Trading Plan for WTI Oil on December 2, 2015
Strategy for today
In trading futures on oil today, we take into account the following factors:
- We consider the relatively limited intraday volatility of the price, which led to mixed calculated indicators of support and resistance levels, carries risks of both strong price breakthroughs and limitations of movement, risks of significant price movement.
- Development of the situation in Syria and the region as a whole. Incoming news, rumors, and the course of the negotiation process can cause an increase in market volatility.
- Development of the crisis situation between Turkey and Russia. Dynamics, statements, and events carry the risk of increasing price volatility.
- We consider the indirect influence on the dynamics of oil prices of the US dollar index. We consider the factor of the upcoming FOMC meeting – the risks of indirect influence on the crude oil market.
- We consider possible facts of statements, remarks, and rumors before the upcoming OPEC meeting in Vienna, from officials of OPEC and non-OPEC countries. This carries the risk of increased price volatility.
- We consider the factor of expectation and fact of the publication of expected statistical data – this carries the risk of reduced liquidity before the release and increased liquidity and volatility upon publication.
Price Condition:
- Weekly – in the oversold zone, current condition – risk of limitation of continuation of movement and limitation of downward impulses.
- Daily price condition – in the sell zone, risks of limited continuation of upward movement.
- Intraday – current condition prevails in the sell and oversold zone – risks of removal of extreme values by corrective movements.
The range level 41.70 – 41.90 is considered as a signal level of local price reversal, taking into account its width.
Buy Positions:
- Testing and closing the price of oil above 41.95 – 4
FAQ
What was the closing price of WTI oil on December 1, 2015?
The closing price of WTI oil on December 1, 2015, was 41.85 dollars per barrel.
What are the key resistance levels for WTI oil on December 2, 2015?
The key resistance levels for WTI oil on December 2, 2015, were R3 = 43.24, R2 = 42.73, and R1 = 42.19.
What factors could influence oil price volatility on December 2, 2015?
Factors include tensions in the Middle East, the Turkey-Russia conflict, OPEC meeting expectations, and economic data releases.
