Tag: Brent crude

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Crude Oil & Commodities

Brent crude broke through resistance at $125/barrel on the Monthly chart, despite the strengthening dollar. Target for the advance is the 2008 high of $145.

ICE Brent Afternoon Markers

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

The broader CRB Commodities Index lags far behind. Breakout above 325 would signal an advance to 370*. But 63-day Twiggs Momentum remains below zero, indicating a primary down-trend, and reversal below the rising trendline would strengthen the signal. Failure of primary support at 290 would confirm.

CRB Commodities Index

* Target calculation: 330 + ( 330 – 290 ) = 370

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Brent crude headed for $145

The long-term, monthly chart shows Brent crude testing resistance at $125/barrel. Breakout would signal an advance to the 2008 high of $145. With 63-day Twiggs Money Flow (above zero) flagging a primary up-trend, respect of resistance is unlikely but would indicate another test of the rising green trendline, above $110.

ICE Brent Crude Afternoon Markers

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

I warned in May last year that every spike in crude oil prices over the last 40 years has been followed by a recession. Reading an article today by James Hamilton, he maintains that:

“There is a good deal of statistical evidence… that an oil price increase that does no more than reverse an earlier decline has a much more limited effect on the economy than if the price of oil surges to a new all-time high.”

I can find no evidence to support this, especially when two spikes below the 1980 high of $40/barrel — in 1990 and 2000 — both resulted in recessions:

Crude Oil And Recessions

US Gasoline and Fuel Oil Expenditure (as a percentage of Total Personal Consumption) gives an even clearer picture of the relationship between crude oil prices and recessions.

US Gas and Fuel Oil Expenditure/Total Personal Consumption

Every spike in Gasoline and Fuel Oil Expenditure over the last 40 years has been followed by a recession — even the twin spikes in 1980 and 1981. One possible exception is the 2002-2006 rise which was only followed by recession in late 2007. This was the era of the “Greenspan bubble” when interest rates were held at low levels for an inordinate length of time, fueling the global financial crisis in 2007/2008. I guess most of us would have settled for a milder recession in 2005.

The weight of evidence favors another recession following the latest oil price spike, though the Fed should have sufficient ammunition to postpone this until after the election.

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Commodities find resistance

Copper broke resistance at $8600/tonne; follow-through would signal continuation of the primary up-trend and point towards economic recovery. 63-Day Twiggs Momentum holding above zero strengthens the signal.

Copper Grade A

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

Brent Crude found resistance at $126/barrel — again while the dollar tests support. Breakout would offer a long-term target of $150*. Reversal below $115 is unlikely, but would warn of trend weakness.

ICE Brent Crude Afternoon Markers

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

The broader CRB Commodities Index is testing resistance at 325. Breakout would signal a primary advance to $350*, while 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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Crude drags commodities higher

Brent crude is headed for a test of its 2011 high at $126/barrel as tensions with Iran escalate. Upward breakout would offer a long-term target of $150*. A trough above the zero line on 63-day Twiggs Momentum reflects the strong up-trend.

ICE Brent Afternoon Crude Markers

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

The CRB Commodities Index is being boosted by rising crude prices, petroleum-based products making up a third of the index weighting. The index itself is testing resistance at 325, while 63-day Twiggs Momentum is at the zero line. Breakout above 325 would signal a primary up-trend with an initial target of 350*.

CBR Commodities Index

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

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Commodities: Crude rises on Iran tensions

Brent Crude is advancing towards its target of $130/barrel* after breaking resistance at $115. Respect of the zero line by the last trough on 63-day Twiggs Momentum strengthens the bull signal.

Brent Afternoon Markers

* Target calculation: 115 + ( 115 – 100 ) = 130

The broader CRB Commodities Index breached its descending trendline but continues to display uncertainty. Breakout above 325 would signal a primary up-trend with an initial target of 350*. A stronger dollar is likely to retard commodity prices.

CRB Commodities Index

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

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Commodities: Copper and crude rise for different reasons

Copper continues in a primary up-trend, driven by speculative demand with a weakening dollar and anticipation of a US recovery. Retracement that respects support at 8000 on the weekly chart would strengthen the signal.

Grade A Copper


Brent Crude broke resistance at $115/barrel for altogether different reasons. Further disruption of supplies from Nigeria and heightened tensions as the US increases pressure on Iran raise concerns about future supply. Expect retracement to test the new support level; respect would confirm a new primary up-trend.

Brent Crude

* Target calculation: 115 + ( 115 – 100 ) = 130

The broader CRB Commodities Index has breached its declining trendline, but proceeds at a slower pace. 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 bull signal.

CRB Commodities Index

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

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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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