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Oil - Short term trading

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Oil Stocks to lead Oil lower?

 

// This thread has been a fragment- soon I will add some content //

 

As I have said elsewhere. I have been expecting Oil to make a peak somewhere between $140 and $160, and then head back towards $80-110. (Then, after the correction, I expect a huge move up in oil. I am currently targetting $400 per barrell for 2010-12.)

 

So were are we now in the oil cycle?

Crude prices have stopped their easy upthrust, and are now becoming more volatile. That is a change that normally markets a transition into a peaking marlet.

 

Here's WTI Crude (WTIC) ... see also: US Oil etf (USO)

wticno1.png

 

The above chart shows more of a parabolic move, and less volatility than I thought it would.

Here's a daily chart of US Oil etf (USO) ... update

usovolatku2.gif

# # # Oil/USO is at the top of a channel (!!) # # #

 

COMPARE: US Oil/USO with the Oil Holder etf/OIH (index pf oil servioce stocks) ... update:USO-vs.OIH

bigun1.gif

 

The OIH tends to TURN a few days (to a few weeks) before OIH.

 

== CLOSER up charts below ! ===

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= = CLOSE-UP = = =

 

The OIH tends to TURN a few days (to a few weeks) before OIH.

 

These turns may be more evident on this six months chart ... update

 

usovoihow2.gif

 

NOTICE: in the chart above:

1/

The second low (labelled "2") preceded at the largest and most powerful move UP in Oil/USO.

What is interesting about that low, is that the Oil Holders (OIH) had already begun an upthrust as USO was making its low.

To put it another way, that important Low was UNCONFIRMED by OIH.

2/

What we are seeing now is a high in oil (USO) which is not being confirmed by OIH , which is already falling away.

 

10 DAYS: Oil/USO versus OIH ... update

bigoh9.gif

 

Investors began to sell OIH heavily yesterday. Could this be a warning that the Oil peak is coming within days?

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That's interesting Dr. B - I was wondering what early indicators there maybe for an Oil pullback.

 

I've quite a few oil service stocks that Im tempted to take some profits on - maybe now's the time.

 

 

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DrBubb, if and when oil pulls back, certainly if it goes bak to $100 a barrell or less, would you expect stock markets to bounce on the back of it? This is what I tend to believe may well happen as the price of oil falls, inflation fears in the market will diminish for a while and we will get a stock market recovery. It may be short lived, but I can see it happening.

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A plausible scenario No. 6 - certailny a lower oil price would take some pressure off corporations in the short term.

 

Maybe Puplava will get his 'creamy filling' after all?

 

Im not entirely certain why the Oil Services have turned lower though. I can see why it could be an early indicator to lower Oil prices. But what has caused the drop in OIH?

 

 

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Obviously 139/138 dpb is a first line of support here. I'm interested to see what happens here.

 

DrBubb - the hairs stand up on the back of my neck whenever I read a comment like yours:

 

As I have said elsewhere. I have been expecting Oil to make a peak somewhere between $140 and $160, and then head back towards $80-110. (Then, after the correction, I expect a huge move up in oil. I am currently targetting $400 per barrell for 2010-12.)

 

Man I want to ride that wave. I feel I was getting ready for this spike but missed it. Surely I must be ready for the next one; a mouthwatering pospect !

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A plausible scenario No. 6 - certailny a lower oil price would take some pressure off corporations in the short term.

 

Maybe Puplava will get his 'creamy filling' after all?

 

Im not entirely certain why the Oil Services have turned lower though. I can see why it could be an early indicator to lower Oil prices. But what has caused the drop in OIH?

And, as if by magic! Expect more of this sort of headline every time oil dips a little.

 

U.S. Stocks Climb as Crude Oil's Retreat Boosts Profit Outlook

 

July 8 (Bloomberg) -- U.S. stocks rose, helping the Standard & Poor's 500 Index rebound from the lowest level since 2006, as oil's steepest two-day drop in almost four months boosted the outlook for profits at retailers and transportation companies.

 

http://www.bloomberg.com/apps/news?pid=206...&refer=home

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THE CRACK in Oil is widening

 

bigsj3.gif

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DrBubb, if and when oil pulls back, certainly if it goes bak to $100 a barrell or less, would you expect stock markets to bounce on the back of it? This is what I tend to believe may well happen as the price of oil falls, inflation fears in the market will diminish for a while and we will get a stock market recovery. It may be short lived, but I can see it happening.

 

The move in Oil from $100 to $400, if we see it, will bring on a Depression in the US

as Trillions of dollars of investments in the suburbs need to be written off and restructured

 

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The small move in OIH, and the "shape" of it :

 

bigty8.gif

 

...suggests that yesterday's jump in Oil may prove a selling opportunity.

I may buy some puts

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Oil hits record near $147 as supply fears intensify

09:27 a.m. 07/11/2008 Provided by

 

 

By Santosh Menon

 

LONDON (Reuters) - Oil leapt $5 to a new record high near $147 a barrel on Friday, spurred by growing worries of threats to supplies from Iran and Nigeria and the possibility of a strike by Brazilian oil workers next week.

 

U.S. crude was $4.85 at $146.50 a barrel by 9:15 a.m. EDT, off highs of $146.90, taking gains in just two sessions to over $10. It rose $5.60 or 4 percent a barrel on Thursday in a late burst of buying activity.

 

London Brent crude was up $4.74 at $146.77 a barrel.

 

Leading the oil complex was ICE gas oil futures which climbed to a new record high of $1,336.75 a tonne amid strong demand for diesel and aviation fuel.

 

Analysts said the threat of supply disruptions provided the bullish backdrop, as the demand picture was unlikely to change much until after the Beijing Olympics.

 

"We continue to believe that the downside risk to oil prices remains relatively low until the non-OECD countries begin to show greater price and income elasticity response than has been evident to date," Deutsche Bank analyst Adam Sieminski said in a note.

 

HOT SPOTS

 

Oil, which had been on the retreat for much of the week, reversed course on Thursday as fears of supply disruptions from potential hot spots, OPEC members Iran and Nigeria, resurfaced.

 

A spate of missile tests by Iran, the world's fourth-largest oil exporter, in the last two days against a backdrop of rising tensions with Israel and the United States has left the oil markets worried.

 

Iran has threatened to strike back at Tel Aviv as well as U.S. interests in a key oil shipping route if it is attacked over its nuclear programme, which Israel and the West fears is aimed at making nuclear weapons.

 

The United States said it was ready to defend its allies.

 

The Movement for the Emancipation of the Niger Delta, the main militant group in Nigeria's oil-producing region, said it was abandoning a ceasefire to protest against a British offer to help tackle lawlessness in the region.

 

Rebel attacks on oil infrastructure in Nigeria, the world's eighth-biggest exporter, have also been partly responsible for the nearly 50 percent rise in prices this year.

 

Investors have also flocked to oil and other commodities this year as a hedge against rising inflation and a weak dollar.

 

Workers at Brazil's Petrobras (PBR) threatened to launch a five-day strike next week that would affect all 42 Campos basin offshore platforms, which account for more than 80 percent of daily oil output of around 1.8 million barrels.

 

Oil has continued rising despite efforts by top exporter Saudi Arabia to raise production to its highest rate in three decades in an effort to tame oil prices.

 

Qatar Oil Minister Abdullah al-Attiyah told Reuters on Friday that he saw no demand for the additional crude that Saudi Arabia had pledged to pump.

 

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Oil hits record near $147 as supply fears intensify

09:27 a.m. 07/11/2008 Provided by

 

 

By Santosh Menon

 

LONDON (Reuters) - Oil leapt $5 to a new record high near $147 a barrel on Friday, spurred by growing worries of threats to supplies from Iran and Nigeria and the possibility of a strike by Brazilian oil workers next week.

 

U.S. crude was $4.85 at $146.50 a barrel by 9:15 a.m. EDT, off highs of $146.90, taking gains in just two sessions to over $10. It rose $5.60 or 4 percent a barrel on Thursday in a late burst of buying activity.

 

London Brent crude was up $4.74 at $146.77 a barrel.

 

Leading the oil complex was ICE gas oil futures which climbed to a new record high of $1,336.75 a tonne amid strong demand for diesel and aviation fuel.

 

Analysts said the threat of supply disruptions provided the bullish backdrop, as the demand picture was unlikely to change much until after the Beijing Olympics.

 

"We continue to believe that the downside risk to oil prices remains relatively low until the non-OECD countries begin to show greater price and income elasticity response than has been evident to date," Deutsche Bank analyst Adam Sieminski said in a note.

 

HOT SPOTS

 

Oil, which had been on the retreat for much of the week, reversed course on Thursday as fears of supply disruptions from potential hot spots, OPEC members Iran and Nigeria, resurfaced.

 

A spate of missile tests by Iran, the world's fourth-largest oil exporter, in the last two days against a backdrop of rising tensions with Israel and the United States has left the oil markets worried.

 

Iran has threatened to strike back at Tel Aviv as well as U.S. interests in a key oil shipping route if it is attacked over its nuclear programme, which Israel and the West fears is aimed at making nuclear weapons.

 

The United States said it was ready to defend its allies.

 

The Movement for the Emancipation of the Niger Delta, the main militant group in Nigeria's oil-producing region, said it was abandoning a ceasefire to protest against a British offer to help tackle lawlessness in the region.

 

Rebel attacks on oil infrastructure in Nigeria, the world's eighth-biggest exporter, have also been partly responsible for the nearly 50 percent rise in prices this year.

 

Investors have also flocked to oil and other commodities this year as a hedge against rising inflation and a weak dollar.

 

Workers at Brazil's Petrobras (PBR) threatened to launch a five-day strike next week that would affect all 42 Campos basin offshore platforms, which account for more than 80 percent of daily oil output of around 1.8 million barrels.

 

Oil has continued rising despite efforts by top exporter Saudi Arabia to raise production to its highest rate in three decades in an effort to tame oil prices.

 

Qatar Oil Minister Abdullah al-Attiyah told Reuters on Friday that he saw no demand for the additional crude that Saudi Arabia had pledged to pump.

 

Just thought I'd add that it's also hurricane season!

 

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SemGroup - i had this note from my broker:

 

"They lost somewhere between $2.4 and $3.2 billion trading oil futures.

 

Biggest trading loss in oil futures ever and no real media talk?"

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Oil hits record near $147 as supply fears intensify

09:27 a.m. 07/11/2008 Provided by

It's amazing what a difference 3 weeks makes...

 

Oil price falls further to $118

http://news.bbc.co.uk/1/hi/business/7542766.stm

 

There have been signs that supplies of oil are improving

Oil prices touched three-month lows of $118 a barrel on Tuesday as traders reacted to news of rising supplies.

 

Simon Nixon made some interesting points in moneyweek last week. I think the most important point to make is that his arguments lend a lot of support to predictions some have made on here and elsewhere of surging oil prices again following this corrrection. I note with interest his comment about China and interest rates as I think a lot of commentators believe a slowdown in China is inevitable and that they have no weapons to fight a slowdown, such as lowering interest rates.

 

He says that he sees five big risks to a deterioration in global credit crisis. Two of these relate to Oil and China as follows:

 

4. Oil and commodities

The sharp fall in the oil price from a recent high of nearly $150 a barrel has been a major relief for the markets. The hope is that this proves that the oil price spike was just a bubble driven by speculators and that oil prices will now continue to fall, leading to lower inflation and paving the way for central banks to cut interest rates.

 

But this is a pretty slender straw for optimists to clutch. After all, it’s an odd sort of bubble that doesn’t appear to have produced evidence of speculators making piles of money from it. On the other hand, if the recent fall is the result of a bubble bursting, the risk is that cutting interest rates will simply re-inflate it, causing the oil price to rise again.

 

5. China

Until recently, one of the key risks hanging over the global economy concerned China. The fear was that the Chinese would try to cool their over-heating economy by raising interest rates and allowing the renminbi to rise against a dollar, leading to a global slowdown and a jump in US inflation. That looks less of a risk, following the latest economic data from China, showing growth slowing to 10.1% and inflation falling to 7.1% from a February peak of 8.7%.

 

Perhaps the bigger risk now is that China concludes that its attempts to cool inflation have worked too well and that it decides to loosen monetary policy. If China’s economy started to fire on all cylinders again, demand for oil and commodities would soar and push up global inflation. That is the last thing the West needs right now – but there’s not much we can do about it.

 

 

 

 

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Pickens says oil won't go below $100

Thu Aug 14, 2008 2:45pm EDT

NEW YORK (Reuters) - Texas oil billionaire T. Boone Pickens said on Thursday crude prices may soon fall as low as $110 a barrel amid falling gasoline demand, but should not sink below $100 because the United States depends heavily on oil imports.

 

"I don't think it'll drop below $100," Pickens told Reuters in a telephone interview. "I would say $110 is where it might go, something like that."

http://www.reuters.com/article/ousiv/idUSN...14?rpc=401&

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Gustav starting to gather momentum it seems.

Rouiller said the storm may head for the Gulf of Mexico sometime between Aug. 30 and Sept. 1. The Gulf is home to about one-fifth of all U.S. oil production.

 

I would usually say this is a bullish signal for the oil price but i'm not convinced so close to the elections. t'will be interesting to watch the correlation

 

two_atl.gif

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This chart - of the WTI-to-Gold ratio

004cr0.png

...suggests you should be shifting from "expensive" Gold into "cheap" Oil.

 

I am calling for a possible Major Low in oil within a few days, and a few dollars.

 

THE CALL is on this thread:

http://www.greenenergyinvestors.com/index.php?showtopic=5014

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Crude Oil Forecast 2009- Time to Buy?

http://www.marketoracle.co.uk/Article7664.html

 

Interesting take on the POO situation. Possibly a very tradeable range of base building during 2009....

 

Trend Analysis - Crude oil is clearly in the overshooting to the downside phase, having plunged through the original target of $80, then overshot support at $60, with the final break of the low of $50 and now assaulting on the $40 support level. Further immediate support exists along decades old resistance areas generated during the 1980's in the region of $35. Therefore this suggests further crude oil downside is limited. However the deep retracement suggests a wide trading band of between $80 and $35, therefore expectations of much price volatility during the base building process during much of 2009.

 

Therefore those now calling on crude oil to head towards $20 are reminiscent of calls for crude oil to hit $200 earlier this year, the overshoot that was going to occur has occurred with the expectations there there is little further downside remaining in future price action. However a bottom has to be formed that will take time to occur.

 

MACD - The MACD indicator is extremely oversold which implies that further immediate downside is extremely limited which suggests a significant multi month corrective rally is imminent.

 

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Nice move up in crude this morning. :)

 

Scrounged up some funds over weekend and bought in first thing after breakfast this morning. Sold out after lunch. Target $50/barrel. Sold around $49.7

 

Up 59% (in sterling) after costs. Funds ready for next trading range.

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