U.S. West Texas Intermediate and international-benchmark Brent crude oil futures has been a roller coaster this week as unexpected stockpiles and concerns over low demand continued to pressure the crude prices while explosion of two tanks in Iran and pressure by Saudi Arabia for supply cuts thrust the crude prices for upside. The U.S. Energy Information Administration (EIA) reported crude stockpiles rose consecutive for a second week, climbing 2.2 million barrels the week-ending June 7 contrary to the economists’ poll where a drawdown of about 481,000 barrels was expected. The greenback government reported that the U.S. stockpiles now stand at 485.5 million barrels, the highest level since July 2017. Unexpected stockpiles hammered down the crude price but the tanker explosions in the Gulf of Oman that caused the supply disruptions and formation of Double Bottom on daily chart fueled the crude prices after hitting a low of 3,536 levels. On June 14, 2019 crude oil prices were dragged down after concerns for lower future demand were raised as China reported weaker economic data but the statement of President Trump for hold an extensive meeting with Chinese President Xi Jinping at the G-20 summit in Japan later this month and Saudi Arabia pressured for supply cuts boost the prices up.
API and Reuters Forecast:
As per the weekly American petroleum Institute (API) storage report a fall by 0.812 million barrels last week to 484.688 million is reported by them that might hammer more on black gold prices.
After incorporating the Three weeks and Five Weeks Exponential Time –Series Forecasting in the previous 11 weeks crude oil inventories data reported by Energy Information Administration, we are expecting that resulted stockpiles of crude oil could increase either by 2.898 million per barrels and 3.765 million per barrels respectively. In order to filter the time period, we have employed a Root Mean Square Error method (RMSE), which is pointing out for Five Weeks Exponential Time Series Forecast, according to which, the Crude Oil Inventories is expected to surge by 2.898 million per barrels making it a total stock piles of 488.398 million per barrel in reserves of U.S. government.
Daily Technical Forecast
On the hourly chart, MCX Crude Oil is trading in a ‘Bullish Flag’ pattern, which signals for a continuation of a bullish trend after consolidation with high reliability. We are expecting a breakout above 3,781 levels would thrust prices to a high of 3,840 and 3,930 levels respectively. RSI has shown a louder move from 40 to 60 levels that will activate buyers. MACD has given a bullish crossover.
Weekly Technical Forecast
On daily scale, the index is trading in a ‘Rectangle’ pattern which signals for consolidation in current trend followed by higher volatility. We are expecting a lackluster performance next week once it will either break 3,830 levels on upside or 3,500 levels on downside. Bollinger Bands are showing lower volatility while Bollinger Bandwidth is hinting for a squeeze in standard deviation.