Has the Oil Bottoming?


On Friday, September 29 2017, WTI closes at $51.67 up from $51.56 (+0.2%) a day before. This is +12.95% q-o-q (Q2 2017: $45.72) and -1.32% y-o-y (Q3 2016: $52.36).


It sounds like oil theme starting to emerge again out of the deep blue ocean after many months. Good closing for Q3 2017 made many analysts say that the oil has bottoming and the industry are back and booming.


SNAPSHOTS

Let us see some fundamental data on Oil & Gas Inventory:


27 Sept 17: Crude Oil Inventories reported a draw of 1.85M barrels, compared to expectations of an 2.5M bbl build.


Commercial crude inventories remain high for this time of year at 471M barrels. US crude imports were up ~59,000 bbls from the prior week and averaged ~7.4M bbls/d.


US production averaged ~9.5M bbls/d with a weekly increase of 37,000 bbls/d caused by increases of 21,000 bbls/d in the Lower 48 and a 16,000 bbl/d increase from Alaska.


Gasoline inventories increased by 1.1M bbls, compared to expectations for a reduction of ~1.1M bbls; daily gasoline production increased to 9.9M bbls/d with refineries operating at ~88.6% of capacity, averaging 16.2M bbls/d.


Natural gas inventories increased 58 bcf, below consensus estimates for a 68 bcf build. This injection brought inventory to ~3,466 bcf, which is within the five-year band and lower than last year's inventory level at this time of 3,600 bcf.


StartFragmentSEASONALITY ANALYSIS

StartFragmentWTI Oil - has sold off 9x by average of -10% and rallied 6x by average of +8.7% for the month of October.EndFragment


Overview of WTI movement to date:


Source: https://www.eia.gov



TECHNICAL WISE


WTI: Bullish with resistance around $56-60 area zone.


USO: Overall bullish trend. However, resistance can be seen around $10.5 area


XLE: In a Bullish trend. Let's see if support holds.

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