Find out the Factors that are Driving our Traders Today - 12/17/18
Oil prices are higher boosted by a weaker US dollar and the drop in the rig count seen via the Baker Hughes data issued Friday. The US oil rig count fell by 4 units. There is otherwise little in the way of fresh news from the weekend.
CFTC data out Friday showed that money managers reduced their net length in WTI on ICE/CME by a combined total of 12,624 contracts. Reuters says that this puts the WTI length at the lowest level since Aug,2016. Gross long positions among money managers on the New York Mercantile Exchange plunged to the lowest since March 2013. (Reuters) Brent length on ICE held by money managers increased by 3,131 in the latest week . That was still near the lowest since September 2015.(Reuters). ULSD net length held by money managers on the CME was basically unchanged -while money managers raised their net length in RB options/futures on the CME by 6,952 contracts.
Technically the sideways price action in the energies continues, though we see some positive signs looking at the weekly price charts. They show rising lows the past few weeks for all except RB -which has the double bottom from 13748-53 to lean on positively when looking at the weekly chart. Momentum on the weekly charts is turning positive for all from oversold condition except Ho -which is neutral and oversold.
For today we see WTI futures with support at 5084-94 then 5006-15 and resistance at 5216-25 then 5288-95. RB spot futures have support at 14141-58 and resistance at 14779-81. ULSD spot futures have support at 18350-70 then 18183 --with resistance lying at 18722-26 then 18842-56. Feb Brent futures sees its support at 5958-61 and resistance at 6197-6202.
NG has gapped lower over the weekend -creating an unhealthy picture when viewing the weekly chart. It seems the market is not happy with temperatures that are near or slightly above normal in the 10-15 day forecast. The eastern portion of the US will not see a White Xmas.
The Baker Hughes rig count for NG was unchanged in the latest period, as per Friday's report.
CFTC data showed that money managers reduced their net length in NG futures/options on CME and ICE by a combined 16,424 contracts. The CME NG data alone showed a combination of reduced longs and new shorts.
The technical picture for NG is not rosy, NG gapped lower, the gap is up to the low from Friday of 3.787.
Price action/ momentum/the fwd curve all have negative undertones at current. The weekly chart shows us an island top due to the gap created this weekend. Last week saw a weekly reversal to the downside as the market posted a higher high than the previous week , a lower low from the week before and closed below the low seen the week before. It will take a filling of the gap -and even more so a close over the 3.787 area to give NG a stable picture. Until then, we believe the contract is on the defensive.
Support for spot NG futures lies at 3.607 low seen overnight, then we see good support in the 3576-3581 area (with the DC mid bollinger near there in the 3570 area), resistance above the 3787 gap lies in the 3824-3827 area.
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