• 2 minutes Oil prices going down
  • 11 minutes China & India in talks to form anti-OPEC
  • 16 minutes When will oil demand start declining due to EVs?
  • 1 min Oil prices going down
  • 15 hours We Need A Lasting Solution To The Lies Told By Big Oil and API
  • 15 hours Another WTH? Example of Cheap Renewables
  • 3 days Bullish and bearish outlook for oil
  • 3 hours What If Canada Had Wind and Not Oilsands?
  • 2 days Trump Hits China With Tariffs On $50 Billion Of Goods
  • 2 days When will oil demand start declining due to EVs?
  • 15 hours The Wonderful U.S. Oil Trade Deficit with Canada
  • 2 days Russia's Rosneft 'Comfortable' With $70-$80 Oil Ahead of OPEC Talks
  • 3 days Rolls Royce shedding 4,600 jobs
  • 8 hours China & India in talks to form anti-OPEC
  • 3 hours Australia mulls LNG import
  • 8 hours No LNG Pipelines? Let the Trucks Roll In
  • 14 hours The Permian Mystery
  • 1 day Gazprom Exports to EU Hit Record
  • 3 days OPEC soap opera daily update
Alt Text

Will Saudi Arabia Listen To U.S. Demands For More Oil?

The Trump administration has asked…

Alt Text

Europe Is Awash With Oil Stored On Ships

Bullish sentiment in markets makes…

Alt Text

Iranian Oil Production Could Be About To Plunge

American, European and even Indian…

Martin Tillier

Martin Tillier

More Info

Trending Discussions

Why WTI Is Stuck In A Range And Why That Is Good for Traders

Basic economic theory would suggest that pricing of goods and commodities is pretty simple. It is a function of supply and demand. Reduced supply and/or increased demand create scarcity that pushes price up and the opposite is true if supply is increased or demand falters. Anybody who has ever traded, however, knows different. What is usually much more important is the anticipation of such changes. All markets are forward discounting mechanisms, so pricing reflects a combination of the past, present and predicted future of supply and demand conditions. Usually the expectations for the future are the most powerful influence, but at times, and now is such a time in the crude oil market, there are conflicting messages about the future, and something else drives pricing. In this case it is proximity to what is increasingly appearing to be a critical price level.

(Click to enlarge)

That level is, for WTI, somewhere around $51-52. To understand the significance of that level you need to look back at the chart for the second half of last year. At that time WTI was in a long term recovery from the lows below $30 and was being driven higher, in part, by the anticipation of, and then the reality of, supply reductions by OPEC.

Despite that strong influence, however, upward momentum stalled twice at around the $52 level. At the time there were several reports that what was causing that resistance was some big selling, presumably as a hedge, by several large…

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