U.S. West Texas Intermediate crude oil futures rallied on Thursday, testing its high for the week amid optimism that that demand for fuel will grow in 2023. The move followed a more than 3% jump on Wednesday. Support was provided by concern over the impact of sanctions on Russian crude oil.
Providing a little resistance for buyers was a massive surprise build in U.S. crude stockpiles and caution over whether the Federal Reserve would use the slowdown in consumer inflation in December to slow the pace of interest rate hikes.
US Consumer Inflation Declines
U.S. consumer prices unexpectedly fell in December. The news pressured U.S. Treasuries and the U.S. Dollar, driving up demand by making dollar-denominated crude oil cheaper for foreign buyers.
The greenback tumbled after inflation data lifted expectations that the Federal Reserve will be less aggressive going forward with rate hikes.
Traders Bracing for Additional Curb on Russian Oil Supply
Crude oil price were also underpinned by traders bracing for an additional curb on Russian oil supply due to sanctions over its invasion of Ukraine.
The U.S. Energy Information Administration said the upcoming European Union ban on seaborne imports of petroleum products from Russia on Feb. 5 could be more disruptive than the EU ban on seaborne imports of crude oil from Russia implemented in December 2022.
Gains Limited by Sizable Jump in US Crude Oil Inventories
Limiting oil’s…
U.S. West Texas Intermediate crude oil futures rallied on Thursday, testing its high for the week amid optimism that that demand for fuel will grow in 2023. The move followed a more than 3% jump on Wednesday. Support was provided by concern over the impact of sanctions on Russian crude oil.
Providing a little resistance for buyers was a massive surprise build in U.S. crude stockpiles and caution over whether the Federal Reserve would use the slowdown in consumer inflation in December to slow the pace of interest rate hikes.
US Consumer Inflation Declines
U.S. consumer prices unexpectedly fell in December. The news pressured U.S. Treasuries and the U.S. Dollar, driving up demand by making dollar-denominated crude oil cheaper for foreign buyers.
The greenback tumbled after inflation data lifted expectations that the Federal Reserve will be less aggressive going forward with rate hikes.
Traders Bracing for Additional Curb on Russian Oil Supply
Crude oil price were also underpinned by traders bracing for an additional curb on Russian oil supply due to sanctions over its invasion of Ukraine.
The U.S. Energy Information Administration said the upcoming European Union ban on seaborne imports of petroleum products from Russia on Feb. 5 could be more disruptive than the EU ban on seaborne imports of crude oil from Russia implemented in December 2022.
Gains Limited by Sizable Jump in US Crude Oil Inventories
Limiting oil’s gains was a hefty and unexpected jump in U.S. crude oil inventories. Crude inventories rose by 19 million barrels in the week-ended Jan. 6 to 439.6 million barrels. Analysts polled by Reuters had expected a 2.2 million-barrel drop.
Weekly Technical Analysis
Weekly February WTI Crude Oil
Trend Indicator Analysis
The main trend is down according to the weekly swing chart. A move through $91.19 will change the main trend to up. A trade through $60.05 will reaffirm the downtrend.
The minor trend is also down. A trade through $81.50 will change the minor trend to up. This will also shift momentum to the upside.
Retracement Level Analysis
The contract range is $36.16 to $106.51. Its retracement zone at $71.34 to $63.03 is the next major downside target and value zone.
The short-term range is $91.19 to $70.31. Its retracement zone at $80.75 to $83.21 is resistance. This zone helped stop the rally at $81.50 two weeks ago.
The minor range is $70.31 to $81.50. The market is currently trading on the strong side of its pivot at $76.79, making it support.
Weekly Technical Forecast
The direction of the February WTI crude oil market the week-ending January 20 is likely to be determined by trader reaction to the minor pivot at $76.79.
Bullish Scenario
A sustained move over $76.79 will signal the presence of buyers. If this move creates enough upside momentum then look for a surge into the short-term retracement zone at $80.75 to $83.21.
Overtaking $83.27 will shift momentum to the upside and could trigger an acceleration to the upside with $91.19 the next major target price.
Bearish Scenario
A sustained move under $76.79 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the support cluster at $71.34 to $70.31.
A failure to hold $70.31 could trigger an acceleration to the downside with $63.03 the next major target price.
Short-Term Outlook
WTI was edging higher ahead of Thursday’s CPI report as traders anticipated a weak number would spawn a slide in the dollar, with the reverse correlation driving up the bid in crude oil. Thursday’s strong rally proved they were right in their assumption. Essentially, crude oil is benefitting from the prospect of a slowdown in Fed rate hikes and a weaker U.S. Dollar.
Furthermore, the market appears to be underpinned by expectations of a softer landing for the U.S. or no hard recession. This, combined with a strong economic rebound in China following the current COVID wave, could make for a better year for prices than previously predicted by stimulating an unexpected surge in demand.
Although it is easy to get bullish on crude oil because of expectations of renewed demand in China, rising equities and a weaker U.S. Dollar, one has to strongly consider the odds of a meaningful rally, given the size of U.S. crude oil and refined products inventories. Unless U.S. supply tightens considerably, gains are likely to be limited, which means more rangebound trading over the near-term.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
