Tag: Crude Oil

Keep An Eye On The Financial Sector

Posted on by Chris Vermeulen

A very interesting price pattern is setting up in the financial sector that could lead to a very big move in the US and Global markets. Remember how in 2008-09, the Financial sector and Insurance sector were some of the biggest hit stock sectors to prompt a global market crisis? Well, the next few weeks and months for the financial sector are setting up to be critical for our future expectations of the US stock market and global economy.

Right now, many of the financial sector stocks are poised near an upper price channel that must be breached/broken before any further upside price advance can take place. The current trend has been bullish as prices have rallied off the December 2018 lows. Yet, we are acutely aware of the bigger price channels that could become critical to our future decision making. If there is any price weakness near these upper price channel levels and any downside price rotation, the downside potential for the price is massive and could lead to bigger concerns.

Let’s start off by taking a look at these Monthly charts… Continue reading "Keep An Eye On The Financial Sector" →

U.S. Crude Production In January Displays A Seasonal Lull

Posted on by Robert Boslego

The Energy Information Administration reported that January crude oil production averaged 11.871 million barrels per day (mmbd), down 90,000 b/d from December. Despite the drop in January, crude production still rose by a spectacular 1.407 mmbd from June through January, a period when capacity takeaway constraints had been expected to slow down the growth in Texas.

crude production

The year-over-year gains have been especially impressive with the January figure being 1.876 mmbd. And this number only includes crude oil. Other supplies (liquids) that are part of the petroleum supply add to that. For January, that additional gain is about 6,950 b/d. Continue reading "U.S. Crude Production In January Displays A Seasonal Lull" →

Crude Oil Hits The Target Early

Posted on by Aibek Burabayev

Back in February, I wondered: “How Far Could Crude Oil Go?” As this commodity confirmed the upside reversal breaking above $54.6. We are still living in a “PetroWorld” therefore the price of oil is crucial, and it impacts all of us around the globe. So, we should watch it carefully.

I spotted a structural similarity on the weekly chart, which was cloned and applied to the current pullback of oil price on the lower time frame daily chart. The price target was set at the $63.7 and the time goal was set on the 6th of May, 2019.

Before we move on to the updated daily chart, I would like to show you the results of your ballot on this topic.

oil price

I can’t express all my gratitude for your voting activity and support of my experiments. The results in the diagram above show that you also saw the area above $60 as a target for the current pullback. It is yet early to say if the price has topped already, but our initial target was achieved and even was passed over ahead of time.

In another ballot, you voted for the instruments you liked the most. Continue reading "Crude Oil Hits The Target Early" →

Crude Oil Nearing Resistance

Posted on by Chris Vermeulen

The recent recovery in Crude Oil has, partially, been based on increasing expectations of a global economic recovery taking place and the continued news that the US/China will work out a trade deal. Crude inventories. Just last week US Crude Oil inventories came in at +7.2 million barrels vs. expectations of -425,000 barrels (). Additionally, concerns in Syria and Libya are pushing prices a bit higher as well. Whenever there are supply concerns or uncertainty out of this region, prices tend to rise.

The facts remain very dynamic for Oil. The US is continuing to produce more and more oil and is expected to become a “net exporter” of oil this year. Economic issues will, eventually, resolve themselves, yet we don’t know the final outcome of these trade deals or how the economy will react to any milestones that are required within the final settlement. And, again, these continuing issues in Libya, Syria and near this region are likely to cause some increased levels of uncertainty over the next 60+ days.

Our researchers believe the $65.00 level will act as resistance to this current upswing. We believe the upside price move may continue to levels near $67.50 before weakening and beginning a topping formation. We believe our expectation that precious metals will bottom near April 21~24 is key to understanding the dynamics of this move in Oil. As long as FEAR does not enter the market, then Oil will likely react to impulse factors exclusively related to Oil. Once Gold breaks out above $1500 per ounce, our belief is that Oil will react to fear factors related to some broader economic event driving investors into precious metals. Continue reading "Crude Oil Nearing Resistance" →

Round 2: Trump Vs. OPEC

Posted on by Robert Boslego

With oil prices having staged a recovery during the first quarter of 2019, primarily due to the withholding of oil supplies from Saudi Arabia, President Trump has once again entered the oil market as a threat. Not since OPEC’s founding in 1960 has an American president been as vocal or involved as Trump.

Trump’s intervention in “Round 1,” summarized below, shocked the market, causing a massive price collapse. However, with close scrutiny of the president’s views, both before taking office and over the past year, the market should not have been so surprised.

Saudi Arabia is in a delicate position. On the one hand, it needs oil prices in the $80s to support it's country’s budget, even if lifting costs are $10 or less. It also knows that a “high price” is not the best price longer-term, due to cutbacks in demand and the increasing availability of substitutes, such as U.S. shale.

But possibly most importantly, it depends on the U.S. for its security. And looking forward, it wants U.S. investment to help diversify its economy as the oil age wanes.

Simply put, it cannot afford to ignore this U.S. president, whose first international trip was to KSA. There is an important political and economic link to the U.S. that it did not have even one president ago (Obama). And its arch-nemesis, Iran, at the same time is being severely harassed by President Trump. Continue reading "Round 2: Trump Vs. OPEC" →