Energy / Oil Prices

• Crude Oil Analysis for the Week of December 19, 2011

  February Crude Oil confirmed its weekly closing price top at $103.28 with its sell-off through the last minor bottom at $95.16 and a key 50 percent level at $95.15. In addition, the penetration and subsequent close under the uptrending Gann angle at $97.73 this week is also a sign of impending weakness. Finally, the market closed on the bearish side of a downtrending Gann angle at $98.07. All of these factors indicate the crude oil market is poised to move lower. The current chart pattern suggests a trade down to a combination uptrending Gann angle/50 percent level at $89.51 is…

• Price of Oil to Remain High as OPEC Limits World Production

  The results of OPEC’s latest meeting to set oil production quotas were on Thursday last week. Instead of production targets for individual countries, a group production ceiling of 30 million barrels a day was set. This amount is a bit less than OPEC produced in November 2011 (actual 30.367 mbd), according to its reckoning, and less than it would have produced most of 2011, if Libyan production had stayed on line, based on the amounts shown in its November Oil Market Report. A recent history of oil production from the November Oil Market Report, both for OPEC and in total,…

• Crude Oil Analysis for the Week of December 12, 2011

  January Crude Oil futures had a strong surge on Friday, but still managed to close lower for the week. Renewed buying helped prices rise for the first time after three consecutive lower-lows. News that the European Union was close to reaching a possible solution to the Euro Zone crisis triggered the turnaround in prices. Brent Crude Oil in London finished 53 cents higher, but West Texas Intermediate rose a lofty $1.07. Despite the strong showing on the daily chart, the weekly chart indicated a slightly lower trade. This was not enough, however, to reverse the market’s course. Based on the…

• Crude Oil Analysis for the Week of December 5, 2011

  January crude oil finished sharply higher last week. The rally was primarily driven by greater demand for risky assets fueled by a weaker Dollar and stronger equity markets. The market started out weak, but at mid-week the U.S. Federal Reserve and other major central banks joined in a coordinated effort to flood the financial markets with Dollars. The added liquidity wasn’t the only factor driving the crude oil market higher. Increased tensions in the Middle East caught the interest of traders as events continue to draw the global community closer to implementing economic sanctions against Iran. Some traders are also…

• Crude Oil Analysis for the Week of November 28, 2011

  January Crude Oil closed lower for the second consecutive week but losses could have been worse if not for a strong comeback on Friday. The primary reason for the weakness throughout the week was concern that the European debt crisis would trigger the start of a global recession. As bearish conditions spread throughout the Euro Region, traders pressured the Euro, driving up the U.S. Dollar and lowering demand for the dollar-based crude oil market. The soft crude oil market firmed up on Friday on the news that violence had erupted in Saudi Arabia. With unrest already taking place in Egypt…

• What is Happening with Brent and WTI Oil Prices and what Can We Expect

  Back in February, I wrote a post called Why are WTI and Brent Prices so Different? In it, I talked about a number of issues, including pipeline issues, contributing to the differential between Brent oil prices (high) and West Texas Intermediate oil prices (low). Recently, I have had some additional insights into what is happening that I would like to share with others. These include: 1. The WTI / Brent oil price differential has, in fact, led to lower prices on oil products in the United States than the rest of the world, and has helped (at least a little)…

• Why I Would Approve the Keystone XL Pipeline Despite Environmental Concerns

  The following is a lengthy essay explaining why I would approve the Keystone pipeline despite finding myself on the side of those concerned over the negative environmental impact of tar sands development. I will debunk much of the misinformation going on in the pipeline debate and ultimately lay out my conclusions. I intend for this to be an alternative to the administration’s announcement to punt the decision for a later time I have to hand it to Bill McKibben. Whether or not you agree with his position, take a look at what he accomplished. McKibben, an environmentalist and journalist, has…

• Implications of the Recent Rise in Oil Prices

  The price of West Texas Intermediate has risen almost $10 a barrel since the start of September, and briefly bumped back above $100 a barrel this week. Here's why I think that development may not be as worrisome for the U.S. economy as it might sound. The first point to be clear about is what we mean by the price of oil. Two of the most popular benchmarks are West Texas Intermediate, which is a light sweet crude whose price is quoted for delivery in Cushing, Oklahoma, and Brent, which comes from the North Sea. The crudes are similar in…

• Crude Oil Analysis for the Week of November 21, 2011

  January Crude Oil futures succumbed to selling pressure last week, reaching a high at $103.37 and forming a closing price reversal top. Once confirmed, this pattern often leads to a minimum 50% correction of the most recent rally. Although a sell-off is likely, it doesn’t mean the trend has changed to down. What this pattern may be doing is giving long traders a reason to take profits before a correction takes place. Aggressive counter-trend traders may be interested in the short-side. Based on the main range from the May top at $115.22 to the October bottom at $75.36, crude oil…

• Crude Oil Analysis for the Week of November 14, 2011

  January Crude Oil finished sharply higher for the week, settling well above a key 50% support at $95.29, but below 61.8% resistance at $99.99. Additional Gann angle support is at $99.36 this week. The next important upside target is a downtrending Gann angle at $101.23. The $99.36 to $99.99 combination should act as a pivot zone, controlling the market’s short-term direction. Since the steep Gann angle moves up at a rate of $4.00 per week. This market is going to have to close above $103.36 on a weekly basis in order for it to maintain its torrid upward pace. Bullish…