• 2 minutes Rational analysis of CV19 from Harvard Medical School
  • 4 minutes While U.S. Pipelines Are Under Siege, China Streamlines Its Oil and Gas Network
  • 7 minutes Renewables Overtake Coal, But Lag Far Behind Oil And Natural Gas
  • 3 hours China wields coronavirus to nationalize American-owned carmaker
  • 29 mins Joe Biden the "Archie Bunker" of the left selects Kamala Harris for VP . . . . . . Does she help the campaign ?
  • 10 hours Open letter from Politico about US-russian relations
  • 1 day US will pay for companies to bring supply chains home from China: Kudlow - COVID-19 has highlighted the problem of relying too heavily on one country for production
  • 3 days Trumpist lies about coronavirus too bad for Facebook - BANNED!
  • 1 min COVID&life and Vicious Circle: "Working From Home Is Not Panacea For Virus"
  • 3 hours Trump Hands Putin Major Geopolitical Victory
  • 10 hours Oil Tanker Runs Aground in Mauritius - Oil Spill
  • 19 hours Trump is turning USA into a 3rd world dictatorship
  • 3 days China's impending economic meltdown
  • 2 days Liquid Air Battery
  • 2 days What the heroin industry can teach us about solar power (BBC)
  • 3 days The Truth about Chinese and Indian Engineering

Bullish Fundamentals Can’t Prevent A Correction In Oil

There are basically two ways to analyze markets and make trading decisions, the fundamental and the technical. Logically speaking, fundamental factors and analysis always have the upper hand, particularly over a longer time period. In the case of crude oil, for example, if supply is outstripping demand the price is going down, no matter what your charts indicate. In the short term, though, as traders pay attention to technical factors they can be enormously powerful. Right now there is a battle going on between the fundamental and technical in the WTI market and, unusually, this looks like one that technical factors will win. Two weeks ago here I predicted higher oil and we did climb from around $51 to $54, but the likely outcome of this battle has caused me to expect another drop from here.

Fundamentals as they stand right now, however, suggest that oil is going up. At the end of November it came as a surprise to many people, me included, that despite differences so sharp that actual wars were being fought, the member countries of OPEC managed to come to an agreement to cut production in a meaningful way. What was even more surprising in some ways was that they managed to secure agreement from several large non-OPEC producers, most notably Russia, to do the same.

Now you can argue that at some point in the future there is a good chance that the agreement will break down, or that U.S. shale producers will simply up production to compensate. The fact is though that…




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