How Far Could Crude Oil Go?

The price of crude oil closed above the earlier top of $54.6 last Friday to confirm the reversal to the upside. So, is it the right time to find out how far we can go with it?

At the end of last May, I posted an early warning of the imminent crash of crude oil price amid the mass media euphoria from the dream of the $100 price tag per barrel, which was a good contrarian indicator. The price of WTI finally dropped last October after it broke long-term support.

I am very grateful to you as you were very active on the poll where I asked you to share your expectations about the crude oil price by the end of 2018. Below are the results of it.

wti crude oil futures

As we can see most of you were ready for the drop of the oil price in the next lower range between $50 and $70 marks, although there were oil optimists in second place, who bet on the price to be in the $70-$90 range. Only those whose bets ranked the third ($30-$50) turned out to be right as oil finished the previous year at $45.8 after hitting the $42 area the day before Christmas.

In this post, I would like to show you some historical similarities, which could help us to understand how deeply the current pullback could go. Let’s start with the bigger chart. Continue reading "How Far Could Crude Oil Go?"

Will Oil Find Support Above $50?

Recent global news regarding Venezuela, China, and global oil supply/production have resulted in the price of Oil pausing over the past few weeks near $53 to $55 ppb. We believe the continued supply glut and uncertainty will result in oil prices falling, briefly, back below $50 ppb before any new price rally begins. Our researchers at The Technical Traders believe historical resistance near $54~55 is strong enough to drive prices lower before new momentum picks up for a renewed price rally.

Oil

Eventually, yes, oil will rally above $55 and attempt to target the $65+ price level. Yet we don’t believe that move is going to happen right now. We believe the global uncertainty; the slowing Chinese economy and the global supply glut will result in a fundamental price decrease before any momentum for an upside price move begins. Our analysis suggests a price move back below $50 ppb, likely targeting the $46~47 level, where basing may occur. Continue reading "Will Oil Find Support Above $50?"

December OPEC Meeting Preview

When the OPEC-Non-OPEC Joint Ministerial Monitoring Committee (JMMC) convened in Abu Dhabi, United Arab Emirates in mid-November, it reported in a press release:

The Committee reviewed current oil supply and demand fundamentals and noted that 2019 prospects point to higher supply growth than global requirements, taking into account current uncertainties. “The Committee also noted that the dampening of global economic growth prospects, in addition to associated uncertainties, could have repercussions for global oil demand in 2019 – and could lead to widening the gap between supply and demand.”

The figures they were reviewing were later released by OPEC in its November Monthly Oil Market Report. For 2019, they are projecting a decline in the demand for OPEC crude oil of about 1.04 million barrels per day to 31.54 mmbd. OPEC’s October production was estimated at 32.9 mmbd.

saudi energy minister khalid
Continue reading "December OPEC Meeting Preview"

Will Oil Find Support Near $60?

Our research team warned of this move in Crude Oil back on October 7, 2018. At that time, we cautioned that Oil may follow a historical price pattern, moving dramatically lower and that lows near $65 may become the ultimate bottom for that move. Here we are with a price below that level, and many are asking “where will it go from here?”.

We believe the support near $65, although clearly broken, may eventually become resistance for a future upside price move. Our proprietary Fibonacci price modeling system is suggesting a new target near $52~53, and we believe this downside move in Oil is far from over at this point.

global climate

The current global climate for Oil is that suppliers are pumping more and more oil into the market at a time when, historically, prices should continue to decline. One of our research tools includes the ability to identify overall bias models for each week, month or quarter. Traditionally, Oil is dramatically weaker in November and relatively flat for December. Continue reading "Will Oil Find Support Near $60?"

Positive Implications For Gold Miners If Crude Oil Breaks Down

It’s an over obsessed upon commodity, previously hyped for its (Hubbert’s) “peak” status by “experts” like T Boone Pickens and a whole clown show of promoters.

Now WTI Crude Oil has reached a thick resistance zone (as managed in NFTRH for the last couple of years) and may be breaking down from a peak of a whole other kind. Here is the monthly chart we use.

Gold Miners

It is preliminary, and one weekend OPEC jawbone could put oil back up in the consolidation. But as of now the price has ticked below the previous 2018 low to close the week. It is not a good look… unless you’re a gold bug, that is. More on that later. Continue reading "Positive Implications For Gold Miners If Crude Oil Breaks Down"