• 3 minutes Could Venezuela become a net oil importer?
  • 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 12 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 21 hours Could Venezuela become a net oil importer?
  • 42 mins Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 1 min Oil prices going Up? NO!
  • 1 day Tesla Closing a Dozen Solar Facilities in Nine States
  • 21 hours Gazprom Exports to EU Hit Record
  • 23 hours EU Leaders Set To Prolong Russia Sanctions Again
  • 21 hours Could oil demand collapse rapidly? Yup, sure could.
  • 21 hours Oil Buyers Club
  • 1 day Why is permian oil "locked in" when refineries abound?
  • 1 day Saudi Arabia plans to physically cut off Qatar by moat, nuclear waste and military base
  • 15 hours Oil prices going down
  • 1 day EVs Could Help Coal Demand
  • 19 hours Saudi Arabia turns to solar
  • 13 hours Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
  • 1 day China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 8 hours Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

More Info

Trending Discussions

Building The Case For A Short-Term Bottom

Crude Oil Outlook

February Crude Oil futures have been drifting sideways since reaching a new contract low at $53.94 on December 16. Although the major fundamentals remain bearish, oversold technical factors may be helping to contribute to the current price action.

There may also be some activity going on behind closed doors between the Saudis and the other OPEC nations that could be underpinning the market, or the cause of the sideways action may be end-of-the-year book squaring by commercial traders or the hedge funds.

Because of the thin holiday trading conditions, we are not likely to know if this sideways action is indicative of bottoming action or just a temporary stop on the way to $50, $40 or even $35 a barrel crude oil.

The downtrend is relatively easy to see on the charts and the fundamentals are simple to understand. When this occurs, trend traders and non-professionals tend to jump in to go along for the ride. The problem with this is that these types of market players often become complacent because they are making money too easily and feel they don’t have to babysit their positions as closely as they would under normal two-sided trading conditions.

If this is occurring then the market will become susceptible to short-covering rallies. One way this sell-off is going to end at least in the short run is when the major shorts begin to cover. The other way is when the hedge and commodity funds run out of bottom-pickers to…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin

Trending Discussions





Oilprice - The No. 1 Source for Oil & Energy News