• 4 minutes Why Trump will win the wall fight
  • 8 minutes Cuba Charges U.S. Moving Special Forces, Preparing Venezuelan Intervention
  • 12 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 16 minutes Washington Eyes Crackdown On OPEC
  • 1 min is climate change a hoax? $2 Trillion/year worth of programs intended to be handed out by politicians and bureaucrats?
  • 1 hour Solar and Wind Will Not "Save" the Climate
  • 4 hours Some Good News on Climate Change Maybe
  • 5 hours Ayn Rand Was Right
  • 13 hours students walk out of school in protest of climate change
  • 5 hours Expected Breakdown: Israel-Central Europe Summit Canceled After Polish Pullout
  • 1 hour Indian Oil Signs First Annual Deal For U.S. OilIndian Oil Signs First Annual Deal For U.S. Oil
  • 1 day Prospective Cause of Little Ice Age
  • 23 hours L.A. Mayor Ditches Gas Plant Plans
  • 1 day *Happy Dance* ... U.S. Shale Oil Slowdown
  • 4 hours IT IS FINISHED. OPEC Victorious
  • 1 day And for the final post in this series of 3: we’ll have a look at the Decline Rates in the Permian

Oil Prices: Fundamental And Technical Analysis Conflict

Analysis of markets of any kind, stocks, bonds, currencies or commodities basically falls into one of two categories, fundamental and technical. In an ideal world both types of analysis support trading in a particular direction. When that is the case the short term moves that technical analysis usually indicates can be used to set up a longer-term position that allows you to take advantage of the fundamental picture. Sometimes, however, it is not that simple as each way of looking at things indicates a move in a different direction. That is where we are at right now in WTI, and that raises the question of which to believe. The answer is both.

In the oil market, fundamental analysis deals with what I usually refer to as “big picture” matters. These are the things that have a bearing on the most basic drivers of price: supply and demand. They include macro issues such as the prospects for world economic growth, and the domestic regulatory environment as well as more specific factors such as output levels and stockpiles both here and overseas. From that perspective, the dispute between Saudi Arabia and Qatar calling the OPEC agreement to restrict production into question, an oil friendly White House and Congress, a recent wobble in growth and a series of terrible inventory reports all point to further drops in WTI.

Technical analysis, on the other hand, is concerned with reading charts and predicting moves based on previous pricing patterns. As you would…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin



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