• 2 minutes Oil Price Could Fall To $30 If Global Deal Not Extended
  • 5 minutes Middle East on brink: Oil tankers attacked off Oman
  • 8 minutes CNN:America's oil boom will break more records this year. OPEC is stuck in retreat
  • 1 hour The Pope: "Climate change ... doomsday predictions can no longer be met with irony or disdain."
  • 10 hours Confirmed: UN Expert Urges Probe Of Saudi Prince Over Khashoggi Killing
  • 6 hours Hormuz and surrounding waters: Energy Threats to the World: Oil, LNG, shipping markets digest new risks after Strait of Hormuz attack
  • 7 hours OPEC, GEO-POLITICS & OIL SUPPLY & PRICES
  • 2 hours Pioneer CEO Said U.S. Oil Production would be up to 15 mm bbls/day NOW if we had the pipelines. Permian pipelines STARTING Q3
  • 2 hours Emissions Need To Be Halved To Avoid 3C Warming
  • 7 hours The Plastics Problem
  • 4 hours Coal Boom in Asia is Real and a Long Trend
  • 53 mins The Magic and Wonders of US Shale Supply: Keeping energy price shock minimised: US oil supply keeping lid on prices despite global risks: IEA chief
  • 31 mins US to become net oil exporter in November: EIA
  • 54 mins Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 5 hours Trudeau approves Trans Mountain Pipeline
  • 10 hours Hydrogen FTW... Some Day
  • 8 hours The Latest: Iranian FM Says US Cannot Expect To ‘Stay Safe’
Alt Text

Should Chevron Walk Away From The Anadarko Deal?

Chevron and Occidental are facing…

Alt Text

What Beijing’s Retaliation Means For Oil

China has fired back against…

ZeroHedge

ZeroHedge

The leading economics blog online covering financial issues, geopolitics and trading.

More Info

Trending Discussions

Crude Fell 23% In October, Will Stocks Follow?

The near WTI futures price is down 23 percent since peaking on October 3rd as traders front ran the Iranian oil sanctions, which went in to place this week.  Fearing spiking oil prices, the U.S. granted waivers to eight of Iran’s largest buyers of crude – China, India, South Korea, Japan, Italy, Greece, Taiwan, and Turkey.

KeyStone Cops Markets

Now fearing the world is amply supplied, traders are selling crude down and down. The U.S. now produces more oil than Saudi Arabia and Russia.

The United States has increased output to more than 11 million barrels a day, surpassing Saudi and Russian production. Saudi Arabia and Russia have also been increasing output to offset the drop in Iranian exports. – CNBC

Testing Key Levels

After bottoming below $42 on June 1, 2017, WTI’s 2-year uptrend has been violated and now testing critical Fibonacci retracement levels.  It has already sliced through the .382 at $63.32 and is now set to test the .500 at $59.12. The next key level is the .618 at around $55, which, if broken, it significantly increases the risk of giving it all back.

(Click to enlarge)

Crude prices are a trending machine and usually need a significant fundamental change, such an OPEC cut, to reverse the trend.  We urge caution.  Watch and wait mode, folks.

Crude Oil And The S&P

Not exactly a perfect correlation, but the chart illustrates both stocks and the oil price tend to move together. Moreover, such a large price divergence as seen over the past month is not sustained.  We suspect crude is sending a signal that stocks are going to, at best, struggle here or move lower.

(Click to enlarge)

Crude Prices And U.S. Jobs

We have written quite a bit about the U.S. labor market over the past year.

The only sector, which has experienced outsized employment growth since January 2017 has been in mining with job growth over 17 percent since President Trump took office. The rise in the oil price has generated demand for roughneck hiring in the oil patch.

(Click to enlarge)

The following chart illustrates how mining support service hiring tracks the oil price but with a lag, from anywhere between 2-8 months. 

(Click to enlarge)

If past is prologue, the downturn in prices won’t begin to be felt in the oil patch for another month or two.

By Zerohedge

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment





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