Tag: Brent crude

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Brent oil on tear with Iran sanctions, Europe winters – Commodities – Futures Magazine

PHIL FLYNN: The Brent crude versus WTI spread has blown out to the highest levels since last October surging over $20 on a combination of gluts, cuts and nuts. As U.S. refiners go into hibernation against a backdrop of weak demand, supply in the U.S. continues to rise. Refiners are cutting runs dramatically at a time when we are seeing rising Canadian oil sand production as well as shale liquids that is creating a glut of crude that seems to be getting more glutinous by the minute. Weak refining margins and the approaching shoulder season are weighing in on the West Texas Intermediate.

On the other hand, Europe scrambles as fears that the nuts in Iran may do something crazy in response to the tightening economic noose around their necks. Add to that a wickedly cold winter and Asian refiners hoarding supply, and we have Brent crude on a tear….

via Brent oil on tear with Iran sanctions, Europe winters – Commodities – Futures Magazine.

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Crude oil and commodities

The weakening dollar is driving up commodity prices. Brent crude is headed for a test of resistance at $115/barrel after earlier breaching the declining trendline, indicating that a bottom is forming. Breakout would signal the start of a primary up-trend, with an initial target of the 2011 highs at $125*. Rising oil prices would add a further brake on the economic recovery.

ICE Brent Afternoon Markers

* Target calculation: 115 + ( 115 – 105 ) = 125

CRB Commodities Index has also signaled that a bottom is forming. Breakout above 325 would signal the start of a primary up-trend, with an initial target of 350*. Recovery of 63-day Twiggs Momentum above zero would strengthen the signal.

CRB Commodities Index

* Target calculation: 325 + ( 325 – 300 ) = 350

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Gold & Commodities: Copper breakout as dollar weakens

The US Dollar Index has retraced to test medium-term support at 79.50. Respect would confirm a strong primary up-trend, while failure would suggest trend weakness. 63-Day Twiggs Momentum above zero still indicates a primary up-trend, but breach of the rising trendline warns that the up-trend is slowing. A weakening dollar is likely to cause stronger commodity prices.

Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

The weekly chart shows spot gold testing its descending trendline. Respect would indicate another test of primary support at $1500/ounce, while breakout would suggest that a bottom is forming. Reversal of 63-day Twiggs Momentum below zero would complete an iceberg pattern, warning of a primary down-trend. The bull-trend of the last few years was driven by quantitative easing (QE1 and QE2) from the Fed. We are unlikely to see another bull-trend without QE3.

Spot Gold

* Target calculation: 1600 – ( 1800 – 1600 ) = 1400

Copper broke through resistance at $8000/tonne, completing a higher trough and signaling a primary up-trend. Recovery of 63-day Twiggs Momentum above zero would strengthen the signal. The primary up-trend in this bellwether commodity suggests an economic recovery is under way.

Copper A Grade

* Target calculation: 8000 + ( 8000 – 7200 ) = 8800

The broader CRB Commodities Index, however, lags behind. Breach of the descending trendline indicates a base is forming, but only recovery above 325 would signal a primary up-trend. Cross-over of 63-day Twiggs Momentum above zero would strengthen the bull signal.

CRB Commodities Index


Brent crude is also forming a base, after breaching its descending trendline. Breakout above 115 would signal the start of a primary up-trend.

Brent Crude Afternoon Markers

* Target calculation: 115 + ( 115 – 105 ) = 125

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Crude oil and commodities threaten breakout

Brent crude has strengthened despite Libya coming back on-stream. Heightened tensions with Iran have increased support above $100/barrel. Breakout above $115 would signal the start of a new up-trend — not a good sign for the global economy. In the long term, recovery above $125 would offer a target of $150*.

ICE Brent Afternoon Markers

* Target calculation: 125 + ( 125 – 100 ) = 150

The CRB Commodities Index has also found support: at 295. Penetration of the descending trendline would suggest that a base is forming, while recovery above 325 would indicate a fresh primary advance.

CRB Commodities Index

* Target calculation: 325 + ( 325 – 295 ) = 355

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Dollar breakout causes gold tremors

The Dollar Index broke through resistance at 80.00, signaling a primary advance to 85.00. Rising 63-day Twiggs Momentum indicates a strong up-trend.

Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

The stronger dollar caused spot gold to weaken, testing the band of support between $1550 and $1600/ounce.

Spot Gold

Gold is also testing the lower trend channel on the weekly chart. Cross of 63-day Twiggs Momentum below zero warns of a trend reversal. Failure of support at $1550 would confirm a primary down-trend.

Spot Gold Weekly

* Target calculation: 1600 – ( 1800 – 1600 ) = 1400

CRB Commodities Index is similarly testing support at 292. Breakout would offer a target of 265*.

CRB Commodities Index

* Target calculation: 295 – ( 325 – 295 ) = 265

Brent Crude is testing medium-term support at $105/barrel. Failure would indicate a test of the lower trend channel.

ICE Brent Afternoon Markers

Some readers questioned why gold and stocks are falling simultaneously — one normally rises when the other falls. A possible explanation is that expectation of quantitative easing, both from the Fed and ECB, has been supporting both markets. As prospects of QE recede, inflation forecasts will be lowered and demand for inflation-hedge assets (stocks and commodities) will fade. We should see a corresponding rise in bond prices (and falling yields) as a result.

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Safe haven demand for dollar and gold eases

The Dollar Index is testing support at 78.00. Narrow consolidation above the support level indicates weakness. Recovery above 79.00 would relieve this, while failure of support would warn of another test of primary support at 75.00.  Rising 63-day Twiggs Momentum, well above zero, however, suggests continuation of the up-trend.

Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

Spot gold is also weak as safe haven demand for both the yellow metal and the dollar has eased. Reversal below $1670 would signal another test of primary support at $1600. Declining 63-day Twiggs Momentum suggests further weakness but the long-term outlook remains bullish with the indicator comfortably above the zero line.

Spot Gold

* Target calculation: 1800 + ( 1800 – 1700 ) = 1900

Increased tensions with Iran are supporting the price of Brent Crude above $105/barrel. Narrow oscillation of 63-day Twiggs Momentum around the zero line indicates uncertainty. Failure of support (and respect of the descending trendline) would indicate another primary decline with a target of $85*. Breach of primary support at $99 would confirm.

ICE Brent Crude Afternoon Markers

* Target calculation: 100 – ( 115 – 100 ) = 85

The CRB Commodities Index respected its descending trendline, suggesting a primary decline to $265*. Follow-through below short-term support at $305 would strengthen the signal, while breach of primary support at $295 would confirm. The Aussie Dollar and Canada’s Loonie both closely follow commodity prices and can be expected to follow the CRB index lower.

CRB Commodities Index

* Target calculation: 295 – ( 325 – 295 ) = 265

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Crude oil

Brent Crude again found support at $105/barrel. Breakout above the trend channel and resistance at $115 would signal the end of the bear-trend and another test of $125. Recovery of 63-day Twiggs Momentum above zero would likewise suggest a primary advance. Failure would re-test primary support at $99.

ICE Brent Afternoon Markers

* Target calculation: 115 + ( 115 – 105 ) = 125

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Commodities and Crude Oil

Brent Crude is testing medium-term support at $105/barrel. Failure is likely if the dollar continues to strengthen and would mean a test of the $99/$100 primary level. Reversal of 63-day Twiggs Momentum below -5% would complete an iceberg pattern, indicating a solid primary down-trend. Breach of primary support would offer a target of $85/barrel*.

Brent Crude Afternoon Markers

* Target calculation: 100 – ( 115 – 100 ) = 85

Roughly only 10% of an iceberg is visible at sea, with most of the ice-mass hidden below the water-line. Similarly, an “iceberg” pattern on a chart describes a situation where +/- 90% of Twiggs Momentum (or a similar indicator) is below zero with only a small peak protruding above. 

CRB Commodities Index is similarly headed for a test of primary support, at 295. 63-Day Twiggs Momentum deep below zero indicates a strong primary down-trend. Failure of support would offer a target of 265*.

CRB Commodities Index

* Target calculation: 295 – ( 325 – 295 ) = 265

That would have a negative impact on the Aussie Dollar and Canadian Loonie which closely track commodity prices.

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Here’s The Real Reason The Price Of Crude Oil Is So Strong

This month’s decoupling of oil from other risk assets, could be foretelling skittishness over recent events in Iran and Syria (where a growing chorus is calling for action against Assad’s brutality), and even over today’s report from the AFP that thousands of Kuwaitis stormed parliament after demanding the prime minister’s resignation.

Additionally, borderline hostile rhetoric towards Iran after a recent explosion at a missile base is putting more focus on their tensions with Israel…..

via Here’s The Real Reason The Price Of Crude Oil Is So Strong.

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Commodities and crude

The CRB Commodities Index remains in a primary down-trend. Respect of the descending trendline, with reversal below 315, would warn of another decline. Breakout above the descending trendline is less likely, but would indicate that the down-trend is weakening. 63-Day Twiggs Momentum penetrated its descending trendline but remains below zero, suggesting that the down-trend has slowed but not reversed.

CRB Commodities Index

* Target calculation: 295 – ( 325 – 295 ) = 265

Copper rallied to test its descending trendline at $8000/tonne. 63-Day Twiggs Momentum deep below zero indicates a strong primary down-trend. Breakout above $8000 would indicate that the down-trend is weakening, while respect of the descending trendline would warn of a decline to 6000*.

Copper Grade A

* Target calculation: 7000 – ( 8000 – 7000 ) = 6000

Brent Crude broke out above its trend channel, indicating that it is forming a base above $100/barrel. 63-Day Twiggs Momentum recovered above zero to confirm the breakout. Expect retracement to test primary support at $100, but respect is now likely and would suggest a primary up-trend.

Brent Crude Afternoon Markers

* Target calculation: 5600 – ( 6600 – 5600 ) = 5100

Nymex WTI crude is rising sharply, closing the divergence from Brent crude. News of the Seaway pipeline reversal that will relieve congestion at the Cushing, Oklahoma hub sent crude futures soaring. Expect a short retracement followed by an advance to $115.

Nymex WTI Crude

Conclusion: Commodities remain in a primary down-trend caused by the strengthening dollar. Brent crude is forming a bottom, but rising crude prices are likely to dash hopes of an early economic recovery. Falling commodity prices should cause sympathetic weakening of the Australian Dollar and Canadian Loonie.

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