• 3 minutes Natural gas is crushing wind and solar power
  • 7 minutes OPEC and Russia could discuss emergency cuts
  • 11 minutes Is Pete Buttigieg emerging as the most likely challenger to Trump?
  • 31 mins So the west is winning, is it? Only if you’re a delusional Trump toady, Mr Pompeo, by Simon Tisdall
  • 25 mins Fight with American ignorance, Part 1: US is a Republic, it is not a Democracy
  • 8 hours Blowout videos
  • 10 hours Question: Why are oil futures so low through 2020?
  • 4 hours “The era of cheap & abundant energy is long gone. Money supply & debt have grown faster than real economy. Debt saturation is now a real risk, requiring a global scale reset.”"We are now in new era of expensive unconventional energy
  • 7 hours Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 5 hours CDC covid19 coverup?
  • 13 hours The Arithmetic Of Fracking
  • 19 hours Charts of COVID-19 Fatality Rate by Age and Sex
  • 1 day Shorting Gold
  • 5 hours Who decides the Oil costs?
Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

More Info

Crude Collapses To Trade In Lower Range

Trading Screen

The energy complex was most interesting this week. Crude oil prices collapsed, led by heavy fund liquidation after another surge in U.S. inventory and production. Natural gas rallied as winter returned after being declared dead about two weeks ago.

Weekly June West Texas Intermediate Crude Oil Analysis

(Click to enlarge)

After consolidating for eight weeks, crude oil prices collapsed, putting the market nearly 7 percent lower for the week. For weeks, we had been reading about the record long positions held by hedge and commodity funds. We also saw that these market players were willing to buy breaks into support, but unwilling to buy strength. This ultimately led to the market collapse because by refusing to come in with enough buying strength to overtake the resistance, they may have inadvertently allowed the short-sellers to gain the upper hand.

Essentially, the hedge and commodity funds, following The Herd Theory, spent all their capital building a potentially bullish position, but then ran out of cash when it was needed to fuel the breakout to the upside.

It was if they thought the OPEC output cuts would be enough to trigger the breakout to the upside and fuel a rally to perhaps $60.00 or $70.00 a barrel. They seemed to have forgotten about the increasing U.S. production. For nine consecutive weeks, U.S. output rose before finally hitting the tipping point this week. They also had nearly a year’s worth of increasing oil…




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