Crude Oil Tensions by Turkey plus Commodity Trading Tips .pdf
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Crude Oil Tensions by Turkey plus Commodity Trading Tips
Crude oil Commodity Trading Prices this week showed ups and downs seeing outlook from the
International agencies like OPEC’s MOMR, EIA STEO and IEA. Coming to the OPEC’s latest July month
release the same showed demand for the OPEC crude oil surging up in coming months. As per the
report, growth in world oil demand in 2016 is expected to be around 1.20 million barrels per day. NonOPEC supply is expected to decline by 0.90 million barrels per day, averaging around 56 MBPD.
For 2017, they further lowered the forecast to 55.90 MBPD from the Non-OPEC regions. Demand for
OPEC crude in 2016 is expected to average 31.9 MBPD, an increase of 1.9 MBPD over the previous year.
In 2017, the demand for OPEC crude is projected at 33.0 MBPD, a gain of 1.1 MBPD over the current
year. Apart from this, Gabon joined the OPEC cartel last week having a production figure of around 0.20
MBPD. Gabon has joined after 21 years and is now the 14th member of the cartel. Thus, we can see that
why Brent crude oil gained more than the WTI International this week.
Imminent to the EIA STEO report, the same forecasted US crude production levels to average around
8.60 MBPD in 2016 and 8.20 MBPD in 2017. But seeing the rising rig count levels the same shall show a
jump. Last week, US crude production showed jump after 4 continuous declines and 22 out of 24 weeks’
declines. In June month the United States pumped around 8.69 MBPD crude oil.
Last but not the least the IEA report tells, Non-OPEC supplies are set to decline by 0.9 mb/d in 2016, to
56.5 mb/d, before rising 0.2 mb/d in 2017. European demand is expected to decline to 1.30 MBPD
averaging deliveries upto 97.40 MBPD. Report also mentioned, OPEC crude output rose by 400 kb/d in
June to an eight-year high of 33.21 mb/d, including newly
EIA’s weekly inventory data for last week was one of the worst data in recent times, showing much more
than expected gasoline and distillate stocks buildup on weekly basis, demand for crude oil, gasoline and
distillate stocks went down by around 2.50%, 0.80% and 13.90% respectively. Though, the crude oil
Commodity stocks declined for the 8th continuous week, unexpected rise in gasoline and distillate
stocks proved bad for the prices. Declining products side demand and higher churning rates have
lowered the crack margins of the refiners in peak summer driving season. If the refiners are not getting
better gasoline crack, they can shift towards the distillate crack, which will further result in distillate
stocks buildups. Already the distillate stocks moved to the most since week ending Jan 8th of this year.
Keeping aside the crude, gasoline and distillate stocks, and jump in weekly production levels from the
United States also pressurized the crude prices. Market was having doubt over the production levels as
the rig counts went up. Last week, the shale productions jumped by around 57,000 barrels per day,
averaging around 8.485 MBPD. The rig counts got revived from its 2009 low levels and thus it showed its
effect. As per the latest release by the Baker Hughes, 6 active crude oil rigs got further added up. Rising
for the third consecutive week, now the rig count is 357, which is near to its March month levels.
Crude Oil Prices for this week, shall witness some downfall with rising products side glut and increasing
shale production levels. As the rig counts moved up further, chances are there for another extra figure in
weekly production levels. Tracking the crude stocks seasonality, the same shall continue its downfall
owing to extra refinery inputs. Gasoline and distillate stocks shall further show buildup due to less
demand and extra refinery churnings with rising tensions in Turkey, crude oil prices shall witness some
intraday volatility. Turkish Straits, counting the Bosporus and Dardanelles, are one of the world’s major
checkpoints for seaborne crude transit, with about 2.9 million barrels of oil passing through. Pipelines
from Iraq and Azerbaijan to Ceyan run through Turkey. Thus, prices shall surge up if any major step is
taken in Turkey
Commodity Advisory Services Technical Analysis:
Crude Oil Mcx August delivery contract the week opened at Rs.3092 and made a high of Rs.3215 but as
expected prices could not sustained on higher levels fell sharply lower. Double top pattern has formed in
daily chart and confirmed bearish trend holding below neck line, expected target is Rs.2954 for coming
days. Short term exponential moving averages 9 and 21 periods are supporting for bearish trend in daily
chart. RSI-14 turned down from over bought zone currently reading at 48.90mark in daily chart, there is
a down side room till 30mark. MACD is entered in negative territory supporting bearish trend for coming
Natural Gas Commodity trading prices went down for the second consecutive week after the
unexpected rise in inventory. Rising to 64 bcf weekly injections from 39 bcf in just a week, prices for
Natural Gas went down. With sudden rise in NG injections, anticipations are being done for less power
generation sector consumptions. Inventories of the heating and power-plant fuel are 22 percent above
the five-year average for the time of year. Looking at the weather outlook as per the CPC, both 6- 10 and
8- 14 days are supportive, showing majority part of the United States under red zone, which means
more than normal temperatures. Central USA is under extra dark red zone, which may cross the CDD
levels more than 350. Natural Gas prices for coming week, shall trade in a range as the weather outlook
is supportive but the inventory buildup in not good. If the power generation sectors will not consume
more Natural Gas then the injections shall increase
Thus, a range bound trade is expected in Natural Gas for the coming week, anticipating some greater
injections in coming days.
Commodity Trading Tips
Buy Gold Mcx Aug On Dips at 30800 sl 30300 Tgt 31500
Sell Crude Oil Mcx Aug on Rise At 3190 sl 3333 Tgt 2990