Finance / the Markets

• Petrobras Shares Fall over Fuel-Subsidies

  Brazil’s state-run Petrobras oil company hailed a small victory last week when the government allowed it to raise fuel prices, but this was tempered by a sharp drop in share prices with the government’s rejection of a request for a clear fuel-subsidy phase-out.During 2 December trading, Petrobras experienced its sharpest drop in five years, with shares losing 9.2% on news of the government’s failure to provide a strategy for reducing fuel subsidies that have kept Petrobras burdened with debt. Petrobras was allowed to raise gasoline prices by 4% and diesel prices by 8% on 30 November, following the government’s approval…

• Oil Market Forecast & Review 6th December 2013

  The technical picture for January Crude Highly has drastically improved since we wrote last week when the market was pressing $91.77. At that time, downside momentum and selling pressure were so strong that it seemed inevitable that the market would eventually reach the June 3 to June 24 price area at $90.35 to $90.40 respectively.  With the Commodity Futures Trading Commission reporting a huge fund short position, it seemed the market was in strong enough hands to at least reach the psychological $90.00 price level before normal profit-taking and bottom-picking activity would chip away and test the resolve of the…

• The Mumbo-Jumbo of the Oil Markets

  There is something awfully similar between black crude oil and black magic; both are equally incomprehensible to the uninitiated and only insiders understand how it really works. How and why a magician is able to pull off the stunts he does can only be understood by those in the loop, though the public at large can benefit from the magic, or at times suffer the consequences of the magic, as the case may be. The magician utters “magical words” to help achieve his tricks. Abracadabra, hocus pocus and the such. Words that mean nothing to those who do not really…

• Oil Market Forecast & Review 29th November 2013

  The technical picture for January Crude Oil futures turned gloomy during this holiday week. After three weeks of consolidation, the inability to garner enough upside momentum to drive the market higher, finally forced counter-trend investors to give up hopes of a breakout rally, driving the market to a level not seen since June. Unless there is short-covering rally on Friday, November 29, it looks as if the market is going to close at or near its low for the week, setting up crude oil for further downside pressure next week. Technically, the weekly chart pattern couldn’t be clearer. Key resistance…

• Are you Listening to the Pundits or the Markets?

  Happy days are here again:  The outpouring of joy at seeing gas prices marginally lower coming into Thanksgiving this year has the oil watchers all aglow – but I am less than convinced.  The market is painting for me a far different story and we need to see the signs correctly to position our energy portfolios.  The dropping price of crude oil from the highs we saw during the late summer has most oil observers and the oil pundits excited – and the ideas behind that dropping price are universally repeated.  We have an increasing supply profile from the newly…

• Oil Market Forecast & Review 22nd November 2013

  After several weeks of consolidation, January crude oil closed in a position to breakout to the upside, as talks between Iran and six other nations to curb Tehran’s nuclear program broke down for the second time in a month. A fresh round of talks began on November 20, however, talks seemed to reach an impasse after a senior Iranian envoy suggested that momentum from the previous round of talks had been slowed. The U.S., Britain, China, France, Germany and Russia had offered a gradual easing of the sanctions against Iran that have crippled its economy for several years. A senior…

• Oil Market Forecast & Review 15th November 2013

  January crude oil futures reached a five-month low this week, however, oversold conditions and technical support points stopped the slide, putting the market in a position to post a potentially bullish weekly closing price reversal bottom. Although the fundamental picture still indicates the presence of supply concerns, the price action seems to be suggesting that the market is stabilizing, making it ripe for a potential short-covering rally. This week, the market was hit by two bearish oil inventory reports. On Wednesday, the American Petroleum Institute said that U.S. crude inventories rose by 600,000 barrels last week. On Thursday, the U.S.…

• Oil Market Forecast & Review 8th November 2013

  December crude oil futures rose this week, driven higher by oversold technical conditions, uncertainty over the Fed’s timing of its plans to taper monetary stimulus and a smaller-than expected rise in crude oil supplies. According to a few technical indicators and oscillators, crude oil had reached oversold levels. Reading these charts is not an exact science, however, traders respect the numbers because they often are associated with surprise rebounds and bear-traps. Given the prolonged move down in terms of price and time, profitable short-sellers want to avoid getting caught short on the wrong side of the market at current price…

• Oil Market Forecast & Review 1st November 2013

  A slew of weak economic data last week and a stronger U.S. Dollar helped pressure December crude oil futures the week-ending November 1. Traders read the economic data as a sign that the recovery was sluggish, leading to expectations of lower demand. This was confirmed by the latest government report that showed U.S. oil supplies rose more-than-expected last week.The latest Federal Reserve monetary policy statement also hurt crude oil prices last week because its ambiguity drove up the U.S. Dollar, making dollar-denominated crude oil more expensive to foreign investors, furthering weakening demand. Traders were caught off guard by the Fed’s…

• Taking Advantage of Temporary Weakness in the Oil Market

  Oil has been headed down, or at least our domestic benchmark has shown continuing weakness over the last five days.  Our investment philosophy has been to concentrate on the domestic E+P players since the spring and we’ve done fantastically well by loading up on mid-cap E+P names like EOG Resources (EOG), Noble (NBL) and Cimarex (XEC).  But what should we be doing now?It’s first important to understand why oil has dipped.  There has been, of course, a lessening of geopolitical risk with the Syria chemical weapons agreement and the overtures of sanctions ending from the government of Iran.  But here…