The price of West Texas Intermediate crude oil dropped over 7% and reached a 14-month low of $50.15 in overnight trade in New York.
Yesterday’s price action extends the rout in crude oil to over 35% since posting a high of $76.90 on October 3rd.
In response, Saudi officials announced that they will attend next week’s G-20 summit in Argentina to meet with US and Russian representatives in front of the OPEC meeting on December 6th in Vienna.
Local oil names STO, OSH and WPL are all under ALGO buy signals and will stand to benefit from any indication that OPEC will cut production into 2019.
We see chart support for OSH at $7.00, STO near $5.25 and WPL in the $31.00 area.
Santos has a price gap in the chart at $5.25 and we’re looking for buying support to build at or slightly above this level.
The horizontal channel on the WPL chart below indicates our target price range where we believe new buying interest will begin to build.
The mid-point is approximately $32.00
STO & OSH should also be considered.
Our ALGO Engine generated a buy signal in Oil Search at $7.50 on October 30th.
With LNG prices firming, we recommend investors accumulate OSH shares at current levels.
OSH is our preferred value opportunity even though WPL and STO also look reasonable over the medium-term.
West Texas Intermediate (WTI) Crude Oil price dropped 1.3% overnight to post their worst monthly performance in over two years.
The combination of trade wars, the global equity market slump and increasing oil stockpiles has raised concerns about oil demand, which pushed the WTI price 10.8% lower during October.
However, with official US sanctions on Iranian oil set to begin on November 4th, some analysts are looking for a bounce in crude oil prices.
Our ALGO engine is currently showing buy signals in the local oil names: WPL, STO and OSH.
We look for all three of this stocks to firm over the near-term with OSH reflecting the best value on a relative basis
Oil prices continue to rise as U.S. sanctions on Tehran squeezed Iranian crude exports, tightening supply even as other key exporters increased production.
Recent signals in OSH and STO continue to push higher. Also, the OOO ETF, (Oil ETF), is now up almost 20% from the recent Algo Engine buy signal.
Oil ETF OOO
Shares of STO have firmed over the last week as investors see the company’s recent acquisition of Quadrant Energy as a net positive to growth.
The addition of Quadrant will increase STO’s ownership of high-grade gas assets in Western Australia.
In addition, the Quadrant fields will strengthen STO’s operating capacity and increase last year’s rise in underlying profit into FY19.
We see initial chart resistance in the $7.35 area.
Oil prices remain well supported by recent platform closures in the Gulf of Mexico ahead of Hurricane Gordon, and Exxon’s warning of a supply crunch in Nigeria.
We recommend buying the dip in Santos near the $6.50 level and also accumulating Origin on the current share price weakness.
OOO.ASX Oil ETF was added to our ETF model back in June and the ETF is now up 8.5%.
WPL and OSH look expensive at current levels and we’ll wait for the next Algo Engine buy signal before considering these names.
Shares of ASX oil names are under pressure in early trade as West Texas Intermediate Crude Oil (WTI) prices dropped over 4% overnight.
WTI prices fell by close to $4.00 per barrel to $70.40 as a confluence of bearish news hit the market.
Increased trade friction between the US and China pushed WTI lower in Asian tarde, while news that Liyba and Saudi Arabia have increased production by a combined 800,000 barrels per day pushed the market through key support levels.
As illustrated in the chart below, WTI has rallied more than $10.00 over the last 5 weeks, which now places initial support $3.00 lower near $67.00.
Similarly, local oil names, OSH, STO, WPL and ORG have rallied over the last month and appear to have more downside price potential over the near-term.
OSH will announce their quarterly production report next Tuesday and STO and WPL will release their reports next Thursday.
We have traded both sides of these names over the last 12 months and will update with specific entry levels near lower technical support areas over the medium-term.
WTI Crude Oil
Our Algo Engine recently triggered buy signal in Santos at $5.60, and with the price action filling the technical gap at $6.10, we’re now comfortable with locking in profits.