• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 10 hours EU has already lost the Trump vs. EU Trade War
  • 2 days Science: Only correct if it fits the popular narrative
  • 3 hours Impeachment S**te
  • 2 days Crazy Stories From Round The World
  • 13 hours Pope Proposes New Sin: Thou Shalt Not Destroy The Harmony Of The Environment
  • 18 hours Everything You Need To Know About Trump
  • 10 hours 55.00 WTI
  • 12 hours Water, Trump, and Israel’s National Security
  • 1 day IEA predicts oil demand will grow annually at 1 million barrels a day for the next 5 years
  • 2 days Iran Burning: Shock Gas Price Hike Triggers Violent Protests After Subsidy Cuts
  • 10 hours Visualizing Pennsylvania Oil & Gas Production (Through September 2019)
  • 2 hours Article: Did Exxon only make $39 Million onshore U.S. last quarter ?
  • 2 days Atty General Barr likely subpeona so called whistleblower and "leaker" Eric Ciaramella
  • 2 days ‘If it saves a life’: Power cut to 1.5 million Californians
  • 18 hours Last I Checked
Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

More Info

Is This Small Correction In Oil Something To Worry About?

Trading Screen

Despite crossing to the strong side of a long-term 50% level earlier in the week to extend the rally, the price action late in the week strongly suggests that March West Texas Intermediate crude oil may have finally found enough resistance and selling pressure to form a top and fuel the start of a short-term correction.

Since early December, crude oil has been on a tear as investors began to buy into the idea that the OPEC-led production cuts could tighten supply over the long-run. If you look at the timing of the price surge, however, you’ll notice that the breakout to the upside was largely fueled by a steep drop in the U.S. Dollar, which helped boost all dollar-denominated commodities like crude oil and gold.

Furthermore, exchange statistics show that hedge funds and other large speculators had been taking on huge long positions, providing the upside momentum the market needed to sustain the rally.

Along the way, the rally was further underpinned by a pipeline shutdown in the North Sea and a pipeline explosion in Libya.

Seven consecutive weeks of drawdowns in U.S. crude oil supply have also had a positive influence on prices.

The plethora of bullish news gave the hedge funds the confidence to continue to build on their long positions week after week despite lingering worries over increasing U.S. production. Hedge fund willingness to buy strength drove the upside momentum into multi-year highs. Traders weren’t playing for dips in…




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