by Gabriel Andre on February 17, 2009
Oil prices are currently moving within a short-term horizontal channel between $35 and $50 a barrel.
Broadly speaking, the bullish scenario will occur if the price action jumps above $50. In this case the objective would be $65. The bearish scenario will occur if price action breaks below $35. In this case the next target would be $20.
On the medium-term, the bearish trend which has started in last July remains valid. The price action still posts lower highs and lower lows.
The recent low has been posted last Thursday at $33.55, but the price strongly rebounded to $37.5 on Friday. Does it mean that a further rebound should follow?
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by Kris Sayce on December 8, 2008
Resources continue to make all the headlines. Only now the question is how low can prices fall?
Take the two lead stories on the News Ltd business web page: “BHP to slash resources output” and “Oil ‘could slump to US$25.‘”
It’s an interesting proposition. And it further highlights why Western economies will not suffer from deflation. Sure, prices for some things may be falling – such as oil and petrol. But will that filter through to other areas of the economy?
We’ve spent the last four years ridiculing central bankers for discounting fuel and food costs from their inflation models, so we aren’t about to discount fuel when it is falling.
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by Gabriel Andre on November 20, 2008
Last week has been a new period of decline for oil prices as they plunged below $60 a barrel. The crude oil future contract for delivery January 2009 is now trading around $54.
Oil prices are of course impacted by the ugly economic news and data which are likely to decrease further the global demand, but also because of the strengthening of the US Dollar, which is negatively correlated with commodities and especially oil products.
Despite the lower production decided by the OPEC recently (by 1.5 million of barrels per day), prices remain weak. Another action to decrease the daily production may be decided in the next meeting which will be held in Egypt on November 29, but it does not appear yet to be a sufficient event to stop the current bearish trend on the oil markets.
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by Gabriel Andre on September 11, 2008
Oil is trading now just above $100, which is broadly a 30% decrease since the highs posted recently on July 11.
The price action fell back below the symbolic level of $100 a barrel 2 days ago but rose yesterday after OPEC meeting in Vienna. The organization agreed to adapt quotas for a total production limit of 28.8 million barrels a day, which will lead to a supply reduction of 500,000 barrels a day. This announcement has been considered therefore slightly bullish by the market.
However the major trend in place remains bearish as high prices and slowing global economic growth have been reducing demand for fuels.
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by Kris Sayce on September 2, 2008
But a look at the statistics from the International Energy Agency (IEA) tells us that there isn’t exactly a big buffer between the amount supplied and the amount demanded.
As this chart shows us, in 2007, total world supply of oil and oil-like products was 85.6 million barrels per day…
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