Oil price discussion and analysis

[scsl]

Re: OIL AGAIN!

Crude for October delivery is currently at about $64. Technically, I think it's oversold and a bounce from the support area of $62.50-$64.50 towards the $70 mark is possible. However, after that, fundamentals such as OPEC lowering its demand forecast again and a warmer than normal winter could see oil prices head below $60.

IMHO, the longer term will see oil go higher than its previous highs and head towards $90-100.

Any charting analysis or fundamental viewpoints would really be appreciated.

 

[Magdoran]

Re: OIL AGAIN!

Crude for October delivery is currently at about $64. Technically, I think it's oversold and a bounce from the support area of $62.50-$64.50 towards the $70 mark is possible. However, after that, fundamentals such as OPEC lowering its demand forecast again and a warmer than normal winter could see oil prices head below $60.

IMHO, the longer term will see oil go higher than its previous highs and head towards $90-100.

Any charting analysis or fundamental viewpoints would really be appreciated.

Tend to agree its found support. The question is will it find a lower high and test down further, or find a higher low and try to resume bullishly?

On the one hand it looks pretty bearish, but when you look at it in the wider context, crude tends to correct hard, then base, then trend up… the problem is the magnitude and timing…

 

[scsl]

Re: OIL AGAIN!

This is an excerpt from a market (oil) report...

In contrast, Morgan Stanley technical analyst Mark Newton said he thinks conditions are right for crude-oil prices to enjoy a bounce that could take prices back above $70 a barrel.

"The recent drop in crude oil ... to oversold territory over the last few months has reached a strong area of support that creates an attractive near-term buying opportunity," Newton said. "Factors such as momentum, sentiment and intermediate-term cycles all suggest that this pullback is buyable from a risk-vs.-reward perspective."

He said a rebound could reach initial resistance at the $68 to $70 a barrel level, while intermediate-term resistance sits in the mid-$70s.

 

[mit]

Re: OIL AGAIN!

On the other hand try

http://articles.moneycentral.msn.com/Investing/CNBC/Dispatch/LowGasolineMaybe.aspx

If everything falls into place, crude could drop perhaps even to $15 a barrel, Verleger says. And then, he says, you would see gasoline at $1.15. Here's how that could occur.

* Oil and gasoline inventories continue to grow. They've been building up all over the world as users and refiners have scrambled to ensure enough supply in case, say, the Strait of Hormuz in the Persian Gulf is shut down. Tankers from Iran, Saudi Arabia, Kuwait, Iraq and other Gulf oil producing countries must pass through the strait to bring crude oil to the rest of the world.

* The weather cooperates. On top of a hurricane with few threats to the oil and gas fields in the Gulf of Mexico, weather cooperation means a warm winter like the winter of 2005-2006. That would drop demand for heating oil, a key heating source especially on the East Coast and in Europe. And that would create excess supplies of crude that refiners could use to make gasoline.

* Tensions in the Middle East continue to ease. This assumes conflicts between Israel and Hezbollah in Lebanon tail off and that Iran and the rest of the world come to an agreement over Iran's nuclear program. (Admittedly, the latter is a reason why the scenario could fall apart.)

* Drivers take the bus. There is anecdotal evidence that U.S. drivers are finding other ways to get around with gas prices above $3. The big question is if they will climb back behind the wheel as prices drop.


Those four pieces are just the start. Beutel thinks two more catalysts are starting to emerge.

1. At current prices, Beutel says, "you can drill a lot of dry holes before you give up on a field." And so, drawn by the potentially huge profits, energy companies are finally starting to make plans to drill for more oil.

2. Beutel thinks buyers are already demanding more fuel-efficient vehicles. "They're not buying SUVs," he says.

I was going to buy oil at around the current prices but the trend continues downward. Globally, I think it will be a problem if oil drops too low in price. High prices have spured governments to find alternatives. I think it currently early enough to give us time to convert to a new economy while there is plenty of oil.

With low oil prices consumption will go up and no doubt our Government will go back to sleep as far as oil is concerned and the next price rise may be caused by peak oil.

MIT

 

[Halba]

Re: OIL AGAIN!

$15 oil yeh right. still not too many commercialised discoveries and a lot of risks in the world still. also gulf of mexico still struggling from last years hurricanes. this hurricane season not over yet either(don't count your chickens before they hatch). Maybe likely $45oil/bbl possible, where it was before the run started. US winter coming also, and with the trend in weather extremes, likely to get pretty cold out there.

Sustainable US$45 oil will result in some quite big economic expansions for many years, and still profitable for the oil producers. IT will lower costs for mining firms like BHP too.

 

[Knobby22]

Re: OIL AGAIN!

Agree 100%, Halba
Lower oil is good for the mining companies.
$45 is the best we can hope for.

 

[nizar]

Re: OIL AGAIN!

Agree 100%, Halba
Lower oil is good for the mining companies.
$45 is the best we can hope for.

oil price wont stay below us$60/barrel for long as OPEC will turn off the taps

 

[scsl]

Re: OIL AGAIN!

Oil is now at $59.03! It's even gone below $59. This big fall from above $63 is on news that there is ample supply going around.

Gold is also down considerably, holding just above $582. I'm not sure what's happening with base metals prices but these falls in oil and gold could signal a dark, dark October...

 

[wayneL]

Re: OIL AGAIN!

Oil is now at $59.03! It's even gone below $59. This big fall from above $63 is on news that there is ample supply going around.

Gold is also down considerably, holding just above $582. I'm not sure what's happening with base metals prices but these falls in oil and gold could signal a dark, dark October...

Is that cash? I've got Nov futs closing at $58.675.

Must be less than that on cash.

Commods in freefall!

 

[wayneL]

Re: OIL AGAIN!

I'm not sure what's happening with base metals prices but these falls in oil and gold could signal a dark, dark October...

I don't follow nickel/zinc etc, but copper took a > 10c per pound hit

Chart:

http://charts.futuresource.com/cis/...=true&STUDY=VOI&STUDY0=1&STUDY1=1&random=9061

 

[Shroomos]

Re: OIL AGAIN!

can anyone recommend a good site to keep posted on current commodities prices, including oil? regards, shroomos

 

[eMark]

Re: OIL AGAIN!

can anyone recommend a good site to keep posted on current commodities prices, including oil? regards, shroomos

You should find these helpful

http://www.bloomberg.com/energy/

http://newsvote.bbc.co.uk/2/shared/fds/hi/business/market_data/commodities/default.stm

http://www.thebulliondesk.com/

eMark

 

[vishaldon]

US cold takes oil soaring high above $60 a barrel

Oil traded yesterday above $60 a barrel after news from OPEC said that it may be cutting oil supply by 1 million barrel a day from actual production with the cold US weather demanding more fuel to keep the heating going in the winter.

With the OPEC cutting the supply the prices will rise again since th cut is coming at a time when demand is high , but one has to keep a watch whether the cut will be from the actual production or not.

Oil has been going up since last week when some oil refineries had to shut down few units for maintenance , reducing crude oil consumption , this tren is carried forward by another possible oil supply cut by OPEC very soon. I feel this is a crucial time for people as OPEC has been quite lucky in keeping everyone's interest and if it happens the way OPEc wants then looks like the whole world is going to dance on the finger tips of OPEC .....

 

[RichKid]

Re: OIL AGAIN!

I've been tracking oil for a while now and as you can see from some of my older charts there were times when I had no idea at all about what it was doing!! The current charts are of oil using Elliott Wave. fyi the major wave 3 terminted just below 2.618 x Height of the major wave 1.

The monthly chart shows some nice trendlines and channels, that blue one intersects current price activity near the 0.382 retracement which is a typical wave-3 retracement level (also note the flip/flop congestion/support area circa $54). This chart was one of the easier ones to label for someone like me who's starting out in EW, so most traditional Elliotticians would have similar labelling imo.

I have an alternative count on this for the current decline, both counts show this first leg as a major wave A- the primary count of this decline shows oil correcting in a wave 4 (usually retraces to the level of the prior degree wave-4 per EW theory).

The alternative count (marked a-b-c) suggests oil has completed this major wave A and is about to bounce into the wave B, which typically retraces 50% of the wave A. I may have to amend the last fortnight's very minor count.

Would be happy to see more of the chartists on ASF discuss this market from their particular field of TA. I still use traditional TA and price/volume analysis, I believe I have gone beyond being an absolute beginner but I'm very much a learner still so will be happy to study with others. For some great EW charting see Wavepicker and MarketWaves charts elsewhere on ASF.

Magdoran has some charts in the Improving Chart Analysis thread so you can see an accomplished trader at work there, his time studies add that extra dimension to the charts and are well worth a look imo.

Wayne, are you trading the swings in this market?

 

[wavepicker]

Re: OIL AGAIN!

I've been tracking oil for a while now and as you can see from some of my older charts there were times when I had no idea at all about what it was doing!! The current charts are of oil using Elliott Wave. fyi the major wave 3 terminted just below 2.618 x Height of the major wave 1.

The monthly chart shows some nice trendlines and channels, that blue one intersects current price activity near the 0.382 retracement which is a typical wave-3 retracement level (also note the flip/flop congestion/support area circa $54). This chart was one of the easier ones to label for someone like me who's starting out in EW, so most traditional Elliotticians would have similar labelling imo.

I have an alternative count on this for the current decline, both counts show this first leg as a major wave A- the primary count of this decline shows oil correcting in a wave 4 (usually retraces to the level of the prior degree wave-4 per EW theory).

The alternative count (marked a-b-c) suggests oil has completed this major wave A and is about to bounce into the wave B, which typically retraces 50% of the wave A. I may have to amend the last fortnight's very minor count.

Would be happy to see more of the chartists on ASF discuss this market from their particular field of TA. I still use traditional TA and price/volume analysis, I believe I have gone beyond being an absolute beginner but I'm very much a learner still so will be happy to study with others. For some great EW charting see Wavepicker and MarketWaves charts elsewhere on ASF.

Magdoran has some charts in the Improving Chart Analysis thread so you can see an accomplished trader at work there, his time studies add that extra dimension to the charts and are well worth a look imo.

Wayne, are you trading the swings in this market?

Some great work there Richkid,

thanks for the charts, lets see if we can get some evidence of a rally starting to build up after this probable impulse down. Gold looks like it's had a bit of a prop up, so maybe oil might not be far behind.

Cheers

 

[RichKid]

Re: OIL AGAIN!

Some great work there Richkid,

thanks for the charts, lets see if we can get some evidence of a rally starting to build up after this probable impulse down. Gold looks like it's had a bit of a prop up, so maybe oil might not be far behind.

Cheers

Thanks! That's the crucial issue now, this impulse has clearly slowed down; but, as expected, if this is a w4, I'd suggest any further w5 lower will be short considering the extended nature of w3.

NB- Typo in original post, that 0.382 retracement level was in relation to w4, accidentally wrote w3! So w4 should retrace about 38.2% of w3 (vertical price displacement). Further evidence of this leg down being completed is that the midpoint of w3 is smack bang at the 50% level, note however that a truncated w5 could result in this measure remaining intact.

 

[patanx]

Re: OIL AGAIN!

Anticipated production cut by OPEC later this week, in addition to fast-approaching U.S. winter season sends crude higher.

Oil prices rose for a fourth straight session Tuesday, topping $60 a barrel as OPEC prepared to agree a production cut and the United States braced for winter.

U.S. light crude for November delivery rose 42 cents to $60.36 a barrel, adding to Monday's $1.37 rally and extending a recovery from a 2006 low of $57.22 touched last week. Brent crude added 21 cents to $61.87 a barrel.

The OPEC cut and winter fears are limiting the downside but at the same time, the upside is limited by the high crude inventories in the United States. In the short term, the market is going to find it hard to go up and equally hard to go down.

Ministers from the Organization of the Petroleum Exporting Countries are due to meet on Thursday in Qatar to finalize a deal to cut one million barrels from daily output to stem oil's rapid slide since a summer peak of $78.40 a barrel.

However, the question remains whether the group, which supplies a third of the world's oil, will cut from its nominal quotas or from current output. Wrangling over market share has delayed agreement on the curbs, first mooted more than two weeks ago.

Several members, including OPEC's largest producer Saudi Arabia, have been producing above their official quotas and have already trimmed production, while others like Indonesia pump far less than their limits and are loathe to cede market share.

The telling thing is that the big boys like Saudi Arabia have yet to say anything and the only noises are coming from those who are producing below quota.

Here you'll find a site with realtime information for free (registration needed and then go to the "Trade now!" section)

 

[vishaldon]

Crude Oil price rises OPEC happy

The prices of the crude oil rise in the US market as the members of the OPEC about to meet tomorrow in Qatar to discuss on the same issue that is weather to cut oil production or to continue with the same output. OPEC had already taken the decision of cutting the production but that was done before the prices were rise. So the market is waiting for tomorrow decision taken by the members. This group has decided to cut production by 3.6 % of the total OPEC production. Organization for Petroleum Exporting Countries that pumps out about 40 % of world oil output. A small reduction in the output might effect to the greater extent to the US market.
OPEC might be happy with the rise in prices and the decision taken by this members is more likely to be positive to the society

 

[RichKid]

Re: Crude Oil price rises OPEC happy

The prices of the crude oil rise in the US market as the members of the OPEC about to meet tomorrow in Qatar to discuss on the same issue that is weather to cut oil production or to continue with the same output. OPEC had already taken the decision of cutting the production but that was done before the prices were rise. So the market is waiting for tomorrow decision taken by the members. This group has decided to cut production by 3.6 % of the total OPEC production. Organization for Petroleum Exporting Countries that pumps out about 40 % of world oil output. A small reduction in the output might effect to the greater extent to the US market.
OPEC might be happy with the rise in prices and the decision taken by this members is more likely to be positive to the society

Vishaldon,
I've pm'd you about this before, please read the forum code of conduct and posting guidelines and post in the relevant thread, you can't create a new thread for every little news item that you publish elsewhere. I have now merged your post with the oil thread as you can see. I won't be issuing any further warnings, please browse through the forums to get a feel for how and what to post.

In relation to the oil chart- we may be completing an ending diagonal here on the dailies so look out for a quick bounce, I may have labelled this prematurely.

 

[phoenixrising]

Re: OIL AGAIN!

Talk around the Sydney Traders Expo last weekend (beside a lot of salesmanship) was that as soon as US Congressional elections are done oil will rebound, ie the Whitehouse has a no high oil price word out to the world.

Interesting to see what happens post elections