[Libya’s interim Oil Minister Ali Tarhouni] said oil production should reach 700,000 barrels a day by the end of the year—nearly half of prewar production—confirming estimates made earlier Thursday by the International Energy Agency.
via Libya Speeds Oil Output but Sees Hurdles Ahead – WSJ.com.
The strengthening dollar should see commodities weaken. Reversal below 315 would indicate respect of the descending trendline — and another test of primary support at 295. Breakout is unlikely, despite the rise of crude oil, but would indicate that the down-trend is weakening.
* Target calculation: 295 – ( 325 – 295 ) = 265
Brent Crude broke through its upper trend channel despite the strengthening dollar (one would normally expect prices to fall). The down-trend is losing momentum and (Brent) crude is likely to form a base above $100/barrel.
The Commodity Futures Trading Commission (CFTC) voted 3 to 2 today to limit trading in oil, wheat, gold and other commodities after a boom in raw-materials speculation, record- high prices and years of debate and delay.
The rule limits the number of contracts a single firm can hold and it limits traders to 25 percent of deliverable supply in the month nearest to delivery.
The price of oil, Canada’s biggest commodity export, reached a new 2011 low Tuesday.
November oil slipped as much as $74.95 US a barrel, its lowest since September of 2010. It recovered somewhat, but still closed down $1.94 at $75.67 on the New York Mercantile Exchange, its third straight day of losses.
Crude rose to three-year highs this year, but the reasons often cited for that increase — fears of growing Middle East tensions, rising Chinese demand, bullish views from investment banks and expectations of an aggressive U.S. stimulus plan — have diminished.
Other market watchers have suggested the price gained solely because of rampant speculation on the commodities markets.
Spot Gold is testing support at its initial target of $1600/ounce. The long tail is evidence of buying support, but failure would test $1500. The primary trend direction remains up and, despite gold experiencing a strong correction, is unlikely to change.
* Target calculation: 1750 – ( 1900 – 1750 ) = 1600
Brent crude is testing support at $104/barrel while Nymex WTI crude is at $80/barrel. There is no sign of the divergence between the two grades closing. Both have signaled a primary down-trend, though Brent has yet to confirm with a break of its rising trendline.
* Target calculation: 105 – ( 120 – 105 ) = 90
The strengthening dollar caused crude prices to soften, with Brent crude headed for another test of support at $104/$105 per barrel. Failure of support would warn of a down-swing to $90, but breakout above the descending trendline is equally likely and would suggest a new primary advance.
* Target calculation: 105 – ( 120 – 105 ) = 90
The spread between Brent and Nymex WTI crude narrowed to $20. An increase in supply from Libya or Nigeria would help to lower Brent prices further.
The Brent Crude rally since mid-August is now testing the descending trendline at $115/barrel. Breakout above this level would warn that the down-trend is ending. Recovery above $120 would signal a fresh primary advance. Rising crude prices are a negative sign for economic recovery, placing a further damper on consumer spending. Reversal below support at $105, however would signal a decline to $90*.
* Target calculation: 105 – ( 120 – 105 ) = 90
Brent crude is stubbornly holding above support at $104/$105 per barrel despite the promise of an early resolution to the conflict in Libya. Even WTI Light crude [lime] recovered slightly after improved manufacturing orders in the US. But the primary trend is down and failure of support at $104 would offer a target of $90 per barrel.
* Target calculation: 105 – ( 120 – 105 ) = 90
