• 4 minutes End of Sanction Waivers
  • 8 minutes Balancing Act---Sanctions, Venezuela, Trade War and Demand
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 14 minutes What Would Happen If the World Ran Out of Crude Oil?
  • 2 hours New German Study Shocks Electric Cars: “Considerably” Worse For Climate Than Diesel Cars, Up To 25% More CO2
  • 5 hours Permafrost Melting Will Cost Us $70 Trillion
  • 2 hours UNCONFIRMED : US airstrikes target 32 oil tankers near Syria’s Deir al-Zor
  • 11 hours Russia To Start Deliveries Of S-400 To Turkey In July
  • 10 hours Occidental Offers To Buy Anadarko In $57 Billion Deal, Topping Chevron
  • 7 hours Nothing Better than Li-Ion on the Horizon
  • 10 hours Facebook Analysts Expect Earnings Will Reinforce Rebound
  • 1 day Countries with the most oil and where they're selling it
  • 2 hours ..
  • 7 hours How many drilling sites are left in the Permian?
  • 1 day Section 232 Uranium
  • 1 day China To Promote Using Wind Energy To Power Heating
Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

More Info

Are Oil Prices About To Turn Lower?

Shale

For weeks, investors had been focusing on whether OPEC will extend its deal with other major producers including Russia to extend its strategy to cut production, trim the excess global supply and stabilize prices. However, the last two weeks, the major influence on the crude oil market has been rising U.S. production. This week, questions about demand have also been thrown into the equation.

If we assume that the supply and demand news is offsetting or balanced then I think we can build a strong case for prices to become balanced over the near-term. Since the rally started at $43.39 and we may have hit a top at $58.14 then it is possible that we could correct back to its 50% level at $50.77 over the near-term.

If this occurs then it may give investors a chance to reassess the fundamentals and decide if they should continue to buy, or increase the selling pressure.

Based on the news this week and the price action, I think there is a very strong possibility that crude oil will break into this price level.

Key Issues Driving the Price Action

Simply stated, there is enough evidence to conclude that the OPEC-led plan to limit production is working. However, it is moving too slowly to achieve its goal to cut supply below the five-year average in a timely manner. Therefore, it feels it needs extend the deal beyond the March 2018 deadline. This is likely to take place when the cartel meets on November 30.

The price action since June indicates that…




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