Previous Week Capsule
Lack of major economic events and slow progress on U.S.-China negotiation deal kept the crude oil prices lackluster last week. MCX Crude Oil started the week on a positive note as the slippage in crude oil inventories by 1.7 million barrels kept the hopes of investors intact but started losing its strength as market veterans are betting against the revival of black gold prices even though the two powerhouse economies come forward with a harmony until the tariffs slapped are lifted by them. Moreover, the conflicts of supply between Saudi Arabia and Russia as the former is supporting for more cuts while the latter is not interested in doing more that kept the prices back and forth.
As per the EIA Report, crude oil inventories reported a slippage of 1.699 million barrels last week. The greenback government reported that the U.S. stockpiles now stand at 442.711 million barrels on Oct 18.
Major Concern this week
All eyes will be set for headlines of U.S.-China trade deal as it is going to act as a major catalyst for providing cushion to the slump in overall demand of the black gold. Although, market veterans are betting only the revocation of tariffs could lift the crude oil prices.
API Forecast this week
As per the weekly American petroleum Institute (API) storage report a marginal increase by 0.592 million barrels is expected today to 443.303 million till October 25 is reported by them that might push the black gold prices lower.
Advisorymandi’s Forecast (Time Series)
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 surge by 3.503 million per barrels or 3.204 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 Three Weeks Exponential Time Series Forecast, according to which, the Crude Oil Inventories is expected to plunge by 3.503 million per barrels making it a total stock piles of 446.244 million per barrel in reserves of U.S. government.
Weekly Trading Strategy
On daily scale, MCX Crude Oil is trading in a ‘Rising Channel’ that signals for consolidated move with a positive bias but a fear of bearish reversal led by extension in volatility cannot be ruled out. The counter is flirting with 100 days Simple Moving Average. RSI has sensed resistance near 60 levels. Stochastic oscillator has given a bearish crossover. The black gold is likely to remain lackluster but a slippage below 3,870 levels will activate sellers for a downside to 3,776 and 3,680 levels respectively.