What a difference a day makes. The DOW up 277 points, gold dropping 10 dollars and crude oil under pressure and falling to its lowest levels in three weeks. Amazing.
We have said this before, and we will say it again ... Sentiment and Perception rule the markets.
I have prepared a short video on crude oil to show you why we feel it is on the defensive and why we should see some lower to sideways action in the near-term
In the video I will show you precise points where I think crude oil will find natural support before resuming its upward trend.
There is no cost for viewing the video and I think you'll find it both educational and informative.
Adam Hewison
President, INO.com
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The problem with your technical analysis is that you have no consideration of supply/demand ratio and the cost to bring oil and gas to market or any political consideration . The other bubble popping examples do not apply for these reasons I've mentioned .For example theirs a finite amount of oil and gas which can't be changed and the cost of finding and bringing to market these commodities become more expensive . At some point , I don't know nor does anyone else althought we may find out , is that if the price of oil becomes below a certain level , there will be no oil , gas or anything because it will be too cheap to drill for .
Time to take positions on the refiners. We have been building a position in VLO. The crack spread should improve for them. Don't wait though! LOL
Dustin,
I can not speak to your particular market place but around where I live gas prices are very volatile and range from $3.92 -- $4.07 per gallon.
Right now in my locale, gas prices are definitely going down, with most stations offering gas for under $4.00/gallon. Back in June when oil went down to the low $120s we were seeing gas prices floor out at $3.85/gallon.
It has been like this for a while. Prior that gas was going one way and that was up-up-up with dime/gallon-week increases being routine with an occasional nickel/gallon-week.
Volume was quite heavy in Crude Oil in the lead up to the new highs, usually a sign of short term weakness.
Thanks for the insight. I'm loving your site. Having access to this many commodities quotes it great.
I have a related question to this post. Gasoline futures have continued to plummet as well, but the price at the pump hasn't moved.
Does this mean that the refiners are taking more profit, or is it the stations themselves. Can you provide some insight on how the commodity price seen here affects the price at the pump. Lag time on price moves, etc...
Thanks.
The link doesn't connect me to the crude oil video. Can you email me the target link?
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Peter,
Please check your email as I have just sent you the link to the Crude Oil video. Please let me know if you need any further assistance.
Best,
Lindsay Thompson
Director of New Business Development
INO.com & MarketClub.com