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.
Woodside Petroleum
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.
Oli Search
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
Our ALGO engine triggered a buy signal for WPL into yesterday’s ASX close at $34.30.
This “higher low” structure is referenced to the intraday low of $31.90 posted on June 5th.
The crude oil market has been extremely volatile over the last few weeks as prices rallied when Saudi Arabia threatened to cut production, only to fall sharply after the Kingdom back flipped and pledged to increase production to 10.7 million barrels per day.
We aren’t bullish crude oil, but now that WPL shares have dropped over 15% in two weeks, we see scope for near-term consolidation.
We will update WPL in a future post with more specific entry levels.
Woodside Petroleum
Recent hurricane activity in the US has overshadowed a report from the International Energy Agency which showed daily Crude Oil production from OPEC climbed by 420,000 barrels for the month of August to just over 32 million barrels per day.
That increase in output has more than made up for the potential decline in Iranian production due to US economic sanctions.
With this in mind, we see topping patterns in both WPL and OSH on the daily charts.
We don’t have recent signals on either stock at the moment.
However, we would expect the recent increase in production, coupled with the risk of lower demand, will put downside pressure on both of these names over the near term.
Woodside Petroleum
Oil Search
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
Origin Energy
Oil Search
Santos
Woodside Petroleum
Prices of all grades of Crude Oil pushed higher overnight as OPEC members prepare to vote on future production levels today in Vienna.
Reports from the meeting have shown no clear consensus from the cartel with the Saudi’s proposing an increase of 1 million bpd, Qatar suggesting 500,000 and Iran rejecting any increase in the daily quota.
Market reports suggest a 500,000 increase is the likely outcome, which would be moderately bearish for crude prices. The result of the vote is expected by 10:00pm, Sydney time.
Both OSH and WPL have been trading near the top-end of their recent ranges and will likely be driven by OPEC’s decision next week.
Oil Search
Woodside Petroleum
The price of West Texas Intermediate (WTI) crude oil dropped 4% overnight to $67.50 on the news that Saudi Arabia and Russia are discussing plans to raise production by over 1 million barrels per day.
Ahead of a key OPEC meeting in Vienna next month, the energy ministers of Russia and Saudi Arabia met in St. Petersburg yesterday to review the terms of a global oil supply pact that has been in place for 17 months.
For the week, WTI tumbled about 4.9%, its biggest loss since early February and a sharp reversal after six weeks of gains. Additional production from US drillers also added weight to WTI prices.
We would expect to see both OSH and WPL trade lower to start the week with key support levels at $7.80 and $31.50, respectfully.
Oil Search
Woodside Petroleum
Yesterday’s investor briefing failed to inspire any fresh buying in WPL as both the technical and fundamental indicators continue to deteriorate.
Analyst’s notes from the meeting highlighted the likelihood of cost over runs with the Scarborough project, as well as the prospect for lower crude oil prices.
Our ALGO engine triggered an initial sell signal at $34.00 on May 10th and again near $34.50 on May 18th.
We see the first area of support near the gap high at $33.10 and more significant support near the $31.50 area.
Shorting WPL has been a popular trade on our SAXO Go CFD platform.
For more information about trading opportunities with CFDs, call our office for an overview.
Woodside Petroleum
Our ALGO engine triggered a sell signal for Woodside Petroleum into yesterday’s close at $34.31.
This “lower high” formation corresponds to the $34.98 high posted on January 15th.
WPL announced a rights issue in early February to raise $2.5 billion for further acquisitions, including the Scarborough gas field in WA. This capital raising pushed the share price to a 10-month low of $28.60.
Since then, the stock price has mirrored the recent rally in global crude oil prices and has gained close to 20% as of yesterday’s close.
However, at current production rates, WPL only has between 12 to 15 years of oil reserves left in its portfolio.
As such, the $2.5 billion dollars it raised for acquisitions looks necessary and it’s likely that without continually spending to acquire additional reserves, the company will not be able to sustain its current level of output.
We see the first key level of support near $32.60 with a further downside target around $31.10.
Woodside Petroleum
Level 29 Chifley Tower
2 Chifley Square
Sydney, NSW 2000
1300 614 002
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