Energy / Oil Prices

• Crude Oil Analysis for the Week of February 6, 2012

  March Crude Oil closed lower last week after posting an expanded range. The market continued its downslide that began five weeks ago when it topped out at $103.90. Heavy selling pressure early in the week drove the market close to a key 50 percent price level at $95.40. After it reached the low for the week on Thursday at $95.44, traders showed their respect for the 50 percent level by creating a short-covering rally that prevented the market from closing on its low. The weekly chart indicates layers of support this week. The first level is the aforementioned $95.40. This…

• What Affect Will High Oil Prices Have on the 2012 Election

  If current trends continue, gasoline prices and U.S. energy policy seem destined to play a larger role in the political debate prior to the November elections than ever before. Gasoline on the East Coast is already within striking distance of all-time highs and most prognosticators are talking about the likelihood of $4+ gasoline before summer. Although the U.S. consumer is more inured to $4 gasoline than four years ago, the crossing of the $4 barrier is bound to set off another round of recriminations and finger pointing as to just who or what is causing this phenomenon. If what happened…

• Crude Oil Market Forecast for the Week of January 30, 2012

  March crude oil closed higher last week after the Fed announced it would keep interest rates at ultra-low levels until late-2014. The news helped trigger a short-covering rally which turned the market around after an earlier set-back. From a long-term perspective the main trend is up, but the developing double-top at $103.20 to $103.90 indicates the presence of selling pressure. Conventional chart pattern analysis says, however, that the double-top will not be confirmed until the swing bottom at $92.95 is violated. Short-term traders seem to be most concerned with the $92.95 to $103.90 range. The mid-point of this range is…

• Peak Oil Crisis Being Compounded by Refinery Closures

  Here is one more thing for those of us who live in the North Eastern U.S. to start worrying about - the refineries that make our gasoline, diesel, heating oil, etc. are dropping like flies.In today's economy, these refineries are simply losing so much money that their owners who are not major oil companies that make billions from oil production are having put them up for sale or close them down. In recent years we lost refineries in Westville, NJ, and Yorktown, Va. A large refinery in southeastern Pennsylvania was shut down in December as was one in New Jersey.…

• China's Energy Firms Invade the Great White North

  Canada is the largest source of U.S. oil imports. According to the U.S. Energy Administration, in 2011 U.S. total crude oil imports averaged 9,033 thousand barrels per day (tbpd), with the top exporting country being Canada (2,666 tbpd), distantly followed by Mexico with 50 percent less, at 1,319 tbpd. But things are in turmoil in the Canadian energy field, not least because last week the Obama administration rejected Republican attempts to fast-track the Keystone XL pipeline, which would have sent Alberta oil sands to U.S. refineries on the Gulf of Mexico. But where others see fiscal turmoil, many Chinese venture capitalists see opportunity.…

• Crude Oil Analysis for the Week of January 23, 2012

  Despite the shift in the fundamentals the week before, March Crude Oil failed to follow-through to the downside and the market finished the week with an inside range. This pattern typically indicates impending volatility since a market like crude oil seldom trades in a tight range two weeks in a row. The main trend is up. This will be confirmed if the market can trade through the recent top at $103.90. This will reaffirm the uptrend, but the market may run into resistance at the downtrending Gann angle at $105.87. On the downside, a trade through the short-term uptrending Gann…

• Natural Gas Analysis for the Week of January 23, 2012

  March Natural Gas gapped lower on the weekly chart. This is a rare occurrence that often indicates exhaustion in markets that have experienced prolonged moves down in terms of price and time, but since this market followed-through to the downside the rest of the week, it probably means lower prices to follow. The sharp plunge in natural gas prices pulled the market away from the pair of downtrending Gann angles it had been attached to since June and July 2011. These two angles are now resistance at 2.5360 and 2.6350. Besides filling in the weekly gap, the market will have…

• How will the Economy Fare if High Oil Prices Continue

  We know high oil prices have an adverse impact on the economy, often leading to recession. According to Economist James Hamilton, 10 out of 11 of US recessions since World War II have been associated with oil price spikes. But where do continuing high oil prices lead us? How will economic contraction “play out,” if tight oil supply and high oil prices continue? Figure 1. Structure built with blocks. Our economy is also built piece by piece, based on the rules and prices that are in effect when individual decisions are made. Clearly there are many possible ways forward. Using…

• Possible Implications of the Iranian Oil Embargo

  As efforts continue to impose sanctions on Iran, I thought it would be helpful to discuss the possible implications of these developments for oil-consuming countries. The most likely outcome of an embargo on oil purchased from Iran is that the countries participating in the embargo buy less oil from Iran while other countries not participating in the embargo buy more oil from Iran ([1], [2]). While this would produce some dislocations, if total world oil production doesn't change, it would have little effect on either Iran or oil-consuming countries, and would basically be a symbolic gesture. If instead the embargo…

• Crude Oil Analysis for the Week of January 16, 2011

  March Crude Oil traded sharply lower last week with an expanded range. Based on the previous week’s failure to follow-through to the upside when the market took out the previous top at $103.20 on its way to $103.90, it looks as if buyers are scarce at the current price level. The close below the psychological $100 price as well as a major .618 Fibonacci level at $99.99, are also signs that crude oil may have gotten too expensive. Pattern watchers will note that the market may be forming a short-term double-top at $103.20 and $103.90. Conventional pattern analysis says that…