• 4 minutes England Running Out of Water?
  • 7 minutes Trump to Make Allies Pay More to Host US Bases
  • 10 minutes U.S. Shale Output may Start Dropping Next Year
  • 14 minutes Washington Eyes Crackdown On OPEC
  • 4 hours One Last Warning For The U.S. Shale Patch
  • 3 hours Oil Slips Further From 2019 Highs On Trade Worries
  • 1 min Chile Tests Floating Solar Farm
  • 20 mins Poll: Will Renewables Save the World?
  • 1 hour Once Upon A Time... North Korea Abruptly Withdraws Staff From Liaison Office
  • 9 hours China's E-Buses Killing Diesel Demand
  • 10 hours Trump sells out his base to please Wallstreet and Oil industry
  • 5 hours China's Expansion: Italy Leads Europe Into China’s Embrace
  • 21 hours Read: OPEC THREATENED TO KILL US SHALE
  • 1 day 3 Pipes: EPIC 900K, CACTUS II 670K, GREY OAKS 800K
  • 20 hours Russian Effect: U.S. May Soon Pause Preparations For Delivering F-35s To Turkey
  • 19 hours Trump Tariffs On China Working
  • 19 hours Biomass, Ethanol No Longer Green
  • 4 hours New Rebate For EVs in Canada
Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

More Info

Oil Market Forecast & Review 1st March 2013

Last week it was mentioned that nearby crude oil was expected to complete a test of the retracement zone at $92.37 to $90.85 and likely stay in this zone until the fundamental traders could reassess the economic conditions. After initially testing the 50% level at $92.37, the market fell further into the zone to $91.92 before establishing short-term support on the daily chart.

Despite the sharp sell-off from $98.79, the main trend is up. Since the break from the top is holding inside the retracement zone, one has to conclude that crude oil is in a corrective mode. Typically, this type of break is triggered by uncertainty. Bullish traders tend to lose their focus and begin to search for excuses to pare positions. This usually means a short-term break into more attractive price levels.

Some of the fundamental reasons for the recent weakness are commercial hedging pressure, a sluggish economy, and lower demand for higher risk assets. One clue that the market was nearing a top was a shift to the short-side of the market by commercial traders according to the Commitment of Traders Report. This was followed by speculation that the economy was at a standstill because of persistent rumors about flat gross domestic production. Finally, turmoil in the Euro Zone and talk of ending the Fed’s bond-buying program drove investors into the safety of the U.S. Dollar.

All three of these factors were relevant to the weakness exhibited in the crude oil futures market…




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