{x} | Trading.live

Fundamentals

During the Asian session on Friday (June 16), WTI crude oil is oscillating upward and is currently trading around $70.9 per barrel. Oil prices surged yesterday, climbing 3% from 68.1 to 70.8. This was triggered by a series of factors, including strong Chinese refinery data, the weaker dollar, as well as the vote by the European Parliament to support Ukraine's entry into NATO, which exacerbated geopolitical tensions. Data released on Thursday expressed that China's refinery processing volume rose 15.4% YoY in May, reaching the second-record high. The CEO of Kuwait's National Oil Corporation (KPC) predicts that Chinese oil demand will keep climbing at a guaranteed speed in the second half of this year. In addition, with the weaker US employment data yesterday and a sharp decline in the US dollar, oil prices gained support and rose to the upside. At present, oil prices are near the 70.5 level of the oscillation center in the early stage, which has entered an embarrassing position for both bulls and bears in the short term. At the same time, as fundamental disturbances are more complex recently, traders still need to be patient and wait for marginal changes.

News: A meeting between the Turkish energy delegation and Iraqi oil officials will be held in Baghdad on 19 June to discuss the resumption of oil exports from northern Iraq. In addition, JPMorgan has cut its average forecast for Brent oil prices in 2023 to $81 per barrel from $90 previously and revised its forecast for US crude futures to $76 per barrel from $84 previously. The downward revision of JPMorgan stemmed from the belief that growth in global supply offset record increases in demand while rising inventories reduced the risk of price climbs. Besides, JPMorgan also lowered its 2024 price forecast for Brent crude oil from $98 to $83 per barrel and revised its estimation for US crude oil futures to $79 from $94 per barrel previously.

Data: US initial jobless claims last week were 262,000, with the expected value of 249,000 and the previous modified value of 262,000. Continuing jobless claims for the week were 1.775 million, with the expected value of 1.765 million and the previous value of 1.755 million. US industrial output fell 0.2% MoM in May, up 0.1% expected and up 0.5% in the previous month. Manufacturing output rose 0.1% MoM, with the expected up of 0.1%, the previous up of 1.0%, and revised to up 0.9%. US retail sales rose 0.3% MoM in May, which is the second consecutive month of growth, down 0.1% expected and up 0.4% in the previous month. Core retail sales lifted 0.1% MoM, up 0.1% expected and up 0.4% in the previous month.

Technical Analysis

Trading at the daily timeframe, WTI surged sharply yesterday, hitting the 71.5 line. A long white body has changed the weakness of the black body with a long upper shadow the day before yesterday. However, the MACD indicator has no clear guidance and the moving averages are also more disordered. Therefore, the momentum of oil prices is declining in the short term. Recently, oil prices have also retreated to around 70.5, which is the center of the previous oscillation box 67-74 as well and is now facing the problem of choosing the direction. Currently, the daily chart is surging sharply. Traders should take long positions based on the correction of prices, according to inertia and momentum. However, as the consistency of bulls and bears is fragile recently, traders should still follow the methods under fluctuating situations to trade, which is to avoid chasing up and killing, and patiently wait for support and resistance positions.

Both bulls and bears still can not give a clear conclusion today. If the oil price lack in strength to rush 71.1, traders can seize the opportunity to take short positions, with the stop loss setting at 71.8. The first target of taking profit is 70, and the second target is 68.5. If oil prices fall to the 68.5-69 range and maintain stable, traders can also take the chance to go long.

Trading Recommendations

Trading Direction: Short

Entry Price: 71.200

Target Price: 68.500

Stop Loss: 72.500

Support: 68.500/67.000

Resistance: 71.500/73.500