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March 22, 2012

Crude & Commodities

Crude oil is rising because of tensions over Iran, but commodities lag far behind, hurt by a stronger dollar and weak global demand. Brent crude is testing resistance at $125/$126 per barrel on the Weekly chart. Narrow consolidation is a bullish sign. Breakout would signal an advance to $150*.

ICE Brent Crude Afternoon Markers

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

The broader CRB Commodities Index, which includes 33 percent petroleum products, is testing medium-term support at 310. Failure would signal a test of primary support at 295, while respect would indicate a primary up-trend with an initial target of 355*.

CRB Commodities Index

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

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.

Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.

Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.

December 31, 2011

Libya’s Largest Oil Port to Resume Exports – WSJ.com

Libya’s largest oil port, Es-Sider, is on the cusp of restarting loadings, which would lift the most important hurdle standing in the way of a return to normal exports following the end of civil war, the country’s oil chief said Thursday.

via Libya’s Largest Oil Port to Resume Exports – WSJ.com.

November 17, 2011

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.

November 10, 2011

Libya Speeds Oil Output but Sees Hurdles Ahead – WSJ.com

[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.

November 10, 2011

Commodity down-trend

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.

CRB Commodities Index

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

November 10, 2011

Crude surge

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.

Brent Crude Afternoon Markers

October 19, 2011

CFTC Limits Commodity Speculation

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.

via CFTC Limits Commodity Speculation.

October 5, 2011

Oil touches new 2011 low – Business – CBC News

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.

via Oil touches new 2011 low – Business – CBC News.

September 28, 2011

Gold and crude suffer from strong dollar

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.

Spot Gold

* 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.

Crude Oil

* Target calculation: 105 – ( 120 – 105 ) = 90

September 14, 2011

Crude

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.

Brent Crude Afternoon Markers (2nd nearest future contract)

* 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.