After a rough go in 2014 and 2015, energy prices slowly began their upward ascent in 2016 after bottoming out under $30 per barrel early that year. Since then, Brent crude oil touched $70 before settling comfortably above the $60 mark this year.
The S&P 500, gold, bitcoin and soybeans do chart bullish to me for next week. In contrast, the yen, euro, pound, Aussie, and crude show some bearish technical conditions for next week-quarter from monthly charts already noted. The short call spread weekly trade ideas in these is derived from bearish candlesticks in multiple time frames, volume and Fisher indicators, and range extension this week. clear. The Aussie, euro, soybeans and British pound show trending pivots for next week, and the yen (two-time frames), gold (two-time frames), Aussie, bitcoin and soybeans have range compression that also can produce wider weekly ranges than average.
Equity markets slid sharply yesterday and remain under pressure into this morning on a stew of news. First, President Donald Trump announced $50 billion in trade tariffs on China directed towards Intellectual Property, adding that there is more to come. On Friday, in what could be an appetizer, China announced $3 billion in tariffs on the United States.
Crude oil sold off on tariff fears but rallied back as Saudi Arabia is signaling that they are just crazy about production cuts and want an extension. It's tariff fears versus rising demand and falling supply for oil and it seems that supply and demand have the edge right now.
With a market cap of $13.5 billion, National Oilwell Varco (NOV) is a leading manufacturer of drilling equipment sold primarily to drilling contractors, marine rig shipyards in Korea and Singapore, and other rig fabricators from plants largely located in Texas. Its revenue is heavily dependent on oil and gas producer and drilling contractor capital spending and the outlook for drilling activity; both of which are sensitive to changes in the price of oil.
Halliburton is the second largest oil service company in the world with a market cap of $46.53 billion. More importantly, Halliburton is the leader in hydraulic fracturing, the largest oil field service market, with its revenue skewed to the United States.
Ecopetrol SA is an energy firm that is up 20% year-to-date, 86% over the last 12-months and sports compellingly bullish technicals after testing support at the 50-day simple moving average following the early February sell-off. Earnings have been mixed with gains of 2.1% and 6.4% during the last two quarters.
You can talk all you want about rising U.S. oil production, but the fact is that U.S. crude oil supply is below average. The Energy Information Agency, in its weekly report, said that U.S. commercial crude oil inventories fell by 2.6 million barrels to 428.3 million barrels, which the EIA says are the lower half of the average range for this time of year. This is happening even as U.S. oil production reportedly increased to 10.047 million barrels of oil a day.