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Sat, 27th May 2017

Anirudh Sethi Report

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Archives of “Crude” Category

Baker Hughes oil rig count rises for the 12 week in a row

Oil rigs up 10 to 672 from 662

Baker Hughes rig count for the current week shows another gain:
  • Oil rigs 672 from 662 last week.  Up 10
  • Gas rigs 165 vs 160 last week. Up 5.
  • Total rigs 839 vs 824 last week. Up 15 for the current week
The price of oil is up  $0.47 to $52.17. That is a gain of +0.93%. The high reached $52.94. The low $51.49.  Key support for oil is around the $51.00 level where the 100 day MA and the 50% of the move down from February high comes in.
The gains today are on the back of the geopolitical unrest from the US Syrian attacks. This week inventories was higher than expectations. Rigs are still rising are negatives but is not having a huge impact.

US Baker Hughes rig count total up to 824 from 809. Up 15.

Oil trading at 50.33.

Total rigs rose by 15 in the current week to 824 from 809.
Oil rigs contributed +10 of that 15 to 662 vs 652 last week
Gas rigs added 5 to 160 from 155 last week.
It was the 11 straight week with increased oil rigs.
This has been the best quarter addition since the 2nd quarter of 2011.
Crude oil is little changed (actually up a few cents) after the report.
The price this week bottomed at $47.01 on Monday.  The high was reached today at $50.56.  Technically, the price moved back above the 100 and 200 hour MA AND the 38.2% of the move down from the Feb 23rd high at $50.04.

Private oil inventory data shows larger than expected build in crude stocks

The official data is today morning (US time), but for now the private survey is out (available to subscribers to their service)

Reuters polling has the consensus expectation for U.S. crude oil stocks to show a build of 1.2 million barrels in this most recent week
More:
  • Gasoline inventory showed a smaller than expected draw

It turns out Libya was all talk

One of the big downside risks for 2017 oil was Libya raising production

Libya is exempted from the OPEC quotas because it’s oil production has been ravaged by war. The situation has slowly improved in the country and months ago, government oil officials there said doubling, or even tripling production was as easy as ‘flipping a switch’.

It turns out that’s not the case.

They declared force majure on loadings from the Zawiya terminal and that’s helped to give oil a boost to session highs — up 2%.

Dollar’s Technical Tone has Deteriorated

The failure of the Fed to signal an increased pace of normalization and the prospects of other central banks raising rates spurred dollar losses, which deteriorated its technical outlook. 
The Dollar Index has been sold through the 61.8% retracement (~100.40) of the rally since February 2 low near 99.25.   If the 100-level is breached now, a return to the early February low, looks more likely.
That 99.25 area is very important from a technical perspective.  It corresponds to a 38.2% retracement of the rally since last May’s low and it is also a neckline of the old head and shoulders pattern.  The measuring objective of the head and shoulders pattern is near 94.75, which is just above the 61.8% retracement of the rally since last May’s low.  The five-day moving average is below the 20-day average for the first time in a month.  Technical indicators are also aligned favoring the downside. 
The euro appears set to test the early February high near $1.0830, which also corresponds to the 50% retracement of the losses since the US election (~$1.0820).  The spike from the December ECB meeting was near $1.0875.  The 61.8% retracement of losses since the US election is roughly $1.0935.  Technical indicators favor additional gains, though the proximity of the upper Bollinger Band (~$1.0750) may deter new aggressive buying before a pullback. 

OPEC will need to extend deal to sustain prices

Reuters poll on the OPEC deal

  • 6/10 analysts say that OPEC will extend the deal past June
  • 2 say they don’t need to extend, and 2 couldn’t make up their minds

Probably by the latter part of April we’ll start to hear the strongest comments from producers about whether they want to extend the deal or not.

Russia oil production cut reaches 179K bpd from October but still not meeting committments

Russian oil production cuts tally

Russian daily oil production is down 179K barrels from October, according to two energy industry sources cited by Reuters.

Total production was 11.068mbpd last week compared to 11.083mbpd a week earlier and 11.247mbpd in October before the cuts went into effect.

The cut falls short of the 200K bpd that was promised in for the first quarter. That’s supposed to escalate to 300kbpd in the months ahead.

The problem is that the production declines look like the regular seasonal dip. The lack of total compliance will also grate on OPEC.

CRB INDEX :Last Hope at 182.20 level.Below This level…More Bloodbath in Crude ,BASE Metals

crb-12

Above is Weekly chart of  CRB INDEX

As Expected it’s Bloodbath…………………….

All Eyes on 182.20 level.Three Consecutive close below 182.20+ weekly close if happens

Target :178.94———177.85 level.

On Rise ,sell sell sell.

(It means more PANIC in BASE METALS ,CRUDE on card )