Today’s bounce on world markets caused a rally of Brent Crude on the hourly chart, testing the former primary support level at $105/barrel. Institutional buying of stocks does not change the fundamentals: high crude oil prices will cause a double-dip recession. No action by the Fed can change this.
* Target calculation: 105 – ( 120 – 105 ) = 90
Retreat below resistance at $105 would confirm that Brent Crude has joined Light (WTI) Crude in a primary down-trend. Target for the down-swing is $90*.
We need a major re-adjustment of crude oil prices to set the global economy on a sound footing.
Colin’s comment is entirely justified. History repeats itself yet government’s refuse to look at the past in order to educate their infantile ministers and advisers (of nil value). High oil prices suck discretionary spending out of consumer’s pockets and causes higher prices as crude oil inputs flow through to everything that used and consumed on earth, exacerbating a deceleration in spending. The recession we now have to have because of stupid government policies of pricing our crude oil and fuel and world and Singapore refinery prices.
As a reader of your web site, and as a person wanting to read something that is easy to understand, I would like a few words after each subject that states –
I believe/feel oil will move downward to ?? (state price ) or
I believe/feel oil will move upward to ?? (state price)
Bottom line keep it simple with bottom line – up or down and price.
The reason I say this, is I do not know the market and all outside factors that move these markets, so I look for a web site that knows.
Thanks
W Bruce Houle
Bruce, There are no certainties in the market. Stocks can go up or down at any time. But there are probabilities. In the present bear market I am 95% sure that stocks will go lower, but don’t bet the farm as there is still a 5% chance that stocks rally. At other times the probabilities may be as low as 50/50 — when it is best not to take a position. Stating actual probabilities can be misleading as this is a judgement call — not a scientific conclusion — and most of the time I stick to statements like “this is likely/unlikely to occur”. Regards, Colin
I have heard this a number of times and I heard it again from an ag student at K-State(Kansas, USA)-that if a certain acreage in most any western state(I would think the southeast part of the US work better) with a warm climate and convert the area, not all that large to algae production the world would not have to rely on crude oil for fuel. The second largest ethanol producer has a plant in Shenadoah, Ia. that is into algae production now and is as I understand starting to move into a larger commercial setup for fuel creation and animal feed(high price corn and potential supply problems with corn will force ethanol companies to a different feed stock and some are already on the move to cellulose). The problem as I see it is the large pool of of oil money that is used to lobby our elected representatives to tie the world to crude oil, constant wars, inflation, etc. I question the objective of oil lobby money because in the end game of keeping the world on the crude oil addiction are they not shooting themselves in the foot by trashing the world economy.
$ 105 is a support level, not resistance.
The crude price was whipsawing around the $105 level on the hourly chart, acting as support and resistance, depending on your time frame.
When I see thousands travelling hundreds of mile each morning to work in th centre of cities I realize oil will always be expensive…..and each afternnon they travel back again…..hundreds of miles again….they must feel like zombies …..and the politicians who oversee all of this are bigger zombies
It’s really quite simple. We have reached the peak of world oil production. Demand keeps rising but production does not. From here production will continue to plateau, then decline. If every historical oil spike has resulted in a recession, then say goodbye to economic growth for a long, long time.