Crude Oil & Natural Gas Archives - Page 9 of 22

June 12, 2017

Crude tests support at $45/barrel

Nymex Light Crude is testing support at $45/barrel. Breach would offer an immediate target of $40. Follow-through below $40 would signal another test of the 2008/2016 lows at $30.

Nymex Light Crude

The chart below plots long-term crude prices adjusted for inflation. Recent falls show real crude prices returning to their previous trading range (0.1 to 0.2) before the 2004 to 2015 “China boom”.

Nymex Light Crude/CPI

The 2004 to 2015 surge in crude prices is very likely a major cause of low global growth over the last decade. Return to the previous trading range would be a bullish sign for the global economy.

May 25, 2017

OPEC extends output cuts but “caught in a pincer”

From Stanley Reed at The Age:

The Organisation of the Petroleum Exporting Countries extended oil production cuts through March 2018, Khalid A. al-Falih, the Saudi energy minister, said in Vienna overnight. The move follows a decision this month by Saudi Arabia and Russia to do so.

The earlier announcement helped lift prices from a low of $US46. But on Thursday, prices shed more than 4 per cent with more than a billion barrels traded….

“Opec is being caught in a pincer movement of technology and policy that will, over time, erode oil use,” said Bill Farren-Price, chief executive of Petroleum Policy Intelligence, an advisory firm for hedge funds and other investors. “This meeting is more about forestalling an oil price collapse than driving prices higher.”

May 8, 2017

Crude falls are likely

Nymex Light Crude broke support at $47/barrel, signaling a down-trend. Follow-through below $45 would confirm.

Nymex Light Crude

Lars Christensen shows that projected oil demand is closely linked to monetary conditions, with a down-turn in oil prices whenever the Fed announces further rate hikes. At present both the PBOC and the Fed are adopting a restrictive stance which should be bearish for crude oil.

May 7, 2017

Oil price fall is caused by tighter monetary conditions | Lars Christensen

Lars Christensen is one of the founding members of the Market Monetarism school of economic thought, having coined the term himself. Market Monetarists advocate that central banks target nominal GDP, instead of inflation, in order to achieve more responsive monetary policy and more stable economic growth.

March 12, 2017

Crude falls below $50

June Light Crude fell sharply last week, ending below $50/barrel in response to rising US inventories.

June Light Crude

Respect of the lower trend channel would suggest that this is a secondary movement and the primary up-trend is intact. Breach of the lower channel would warn that the primary trend is weakening.

November 1, 2016

Crude stalls

December Light Crude retreated below support at $50/barrel, suggesting another test of primary support at $42/barrel.

December Light Crude

Respect of primary support would suggest further ranging between $42 and $52/barrel. Breach of support, which seemed so unlikely only two weeks ago, is now a possibility and would warn of another test of the January trough at $35/barrel.

October 22, 2016

Crude: Another advance likely

Nymex December Light Crude is consolidating above the new support level at $50/barrel. Respect is likely and would confirm the primary up-trend. Target for an advance is $56/barrel*.

December Light Crude

* Target: 50 + ( 50 – 44 ) = 56

October 14, 2016

Crude tests key level at $50

December Light Crude is retracing to test new support at $50/barrel after the recent breakout.

December Light Crude

If we look at the longer term weekly chart we can see how important this level is. Respect of $50 would confirm the primary up-trend. There is still doubt that support will hold — and that OPEC will be able to craft an agreement that will satisfy members while restricting supply. Failure would suggest that crude will revert to ranging between $40 and $50.

Nymex Light Crude

September 30, 2016

OPEC deal a fake

OPEC announced an agreement to cut production — to between 32.5 million and 33 million barrels per day from current levels of 33.2 million barrels — without agreement as to which members will bear the brunt of the production cuts. FGE Chairman Fereidun Fesharaki calls this “a fake deal” and explains that OPEC could not afford to come away from Algiers empty-handed.

http://video.cnbc.com/gallery/?video=3000555509

Nymex Light Crude rallied to $48/barrel and looks set to test resistance at $50. Breakout above $50 would signal a primary up-trend but respect is more likely, once the market gets past the headlines, and would suggest further consolidation between $40 and $50.

Nymex Light Crude

August 5, 2016

Crude testing $40

Light Crude (September contract) is testing medium-term support at $40/barrel. Breach of support would signal a test of primary support at $33 to $34. Respect of support, on the other hand, would indicate another test of resistance at $50. And breakout above $50 would signal a primary up-trend.

WTI Light Crude September Contract

The long tail and strong volume at $40 suggest that support may hold. But I wouldn’t bet the house on it. Especially when gasoline inventories have surged, the US rig count is rising …..and demand is set to fall.