WTI Crude Oil chart update

[drbubb]

Orig.Comment: "Just a bit further to go on the Downside, I reckon" ... orig.chart

 

WTI Crude-10.nov ... update : USO w/200wk : USO.10d

BOTTOM in Place, and shares have moved already higher in anticipation

 

 

(note: 126weeks= 610days, a fibo number)

 

= = = = =

LINKS;

Oil ETFs on advfn : http://www.advfn.com/cmn/fbb/thread.php3?id=12569179

[drbubb]

Oil Falls Below $66 a Barrel on Expectations OPEC Won't Change Output Targets

Monday September 11, 1:56 am ET

 

 

SINGAPORE (AP) -- Oil prices fell below $66 a barrel in Asian trading Monday amid expectations that OPEC ministers would not change their production targets when they meet later in the day.

Light, sweet crude for October delivery fell 28 cents to $65.97 a barrel in electronic trading on the New York Mercantile Exchange, midmorning in Singapore.

 

The contract fell $1.07 Friday to settle at $66.25 a barrel -- the lowest closing price since finishing at $66.23 on April 6.

 

Key oil ministers of the Organization of Petroleum Exporting Countries said Sunday on the eve of the meeting that there is no reason for the cartel to change its production targets.

 

With prices hovering around $67 a barrel and supplies outstripping demand, the 11-nation Organization of Petroleum Exporting Countries almost certainly will keep its current production quota steady when it meets Monday in Vienna, said Mohamed Bin Dhaen al-Hamli, the United Arab Emirates' energy minister.

 

Although prices are more than $10 a barrel off their July highs, economists concede that jittery market sentiment -- fueled by pipeline problems and political turmoil in the Middle East -- does not leave OPEC with much choice. Cutting output would drive prices even higher, and pumping more is not an option for most members already producing at maximum capacity.

 

But supplies remain ample. Al-Hamli said OPEC maintains about 2 million barrels a day of spare capacity, and stocks are high elsewhere; the U.S. Department of Energy said last week that inventories have hit their highest levels since 1998.

[drbubb]

WTI hit $63.60 yesterday, right on the key 78week MA

 

that's low enough to make a low,

and the red stochastic ma is also low enough to signal a low if the market jumps

[drbubb]

THE MEDIA is talking a fall to $45.

 

see: http://www.forbes.com/video/?video=fvn/bus...artner=yahootix

 

could this be the low at $63 ??

[Mabon]

THE MEDIA is talking a fall to $45.

 

see: http://www.forbes.com/video/?video=fvn/bus...artner=yahootix

 

could this be the low at $63 ??

 

Iran won't like that, Oil is their only major export, other than Rugs.

[drbubb]

Can crude stay above the rising trendline, now at $60? I think so.

 

WTI rallied at bit, closing at $64.02, and staying above the 78-week MA.

 

The slow STO shows that Crude is v.oversold now - enough to give at least a good bounce.

And the MA on the STO is now below 20%, which is typically where lows come in

 

Next week could tell the story. Another big fall could bring it to $60-61. But i dont expect that.

 

Gold also looks set for a rally, as gold shares are showing decent relative strength the past few days

[Guest Guest]

The thing is, that forbes video showed what I thought was contradictory information to the economist's viewpoint.

 

i.e less discoveries since 1964

 

production of oil down since the 70s.

[drbubb]

low may be in place - $60 was reached after all

 

[drbubb]

Looks like the OIL LOW is now in place

 

 

That nice bounce in the Stochastic is a confirmation of sorts

[drbubb]

THE BOTTOM FOR CRUDE OIL

by Frank Barbera ... October 12, 2006

 

 

Back on July 25th of this year, I wrote a piece for the Market WrapUp updated July 25th (see archives) wherein I talked about a stock market bottom (in a series of articles) and a potential top in Crude Oil. In that article, I noted that on a longer-term trend basis, the new series of higher highs in Crude Oil, were showing many signs of failing momentum. Momentum measures the force underpinning any advance in price and when prices are advancing against the backdrop of declining momentum, it is usually only a matter of time before they roll over in slide in a large correction.

 

In the case of Crude Oil, I showed the chart below with the Weekly Oil chart and the Weekly RSI. RSI is a normalized momentum indicator, meaning it measures the degree of momentum within a market and attempts to reflect the underlying forces on a fixed or normalized scale. This is a different approach then say, Moving Average Convergence-Divergence (MACD), another popular momentum indicator, which uses a non-bounded scale and can be equally effective. Back on July 25th, the technical picture of Crude Oil showed a classic 5 wave advancing pattern coming to a peak with the 5th wave, showing hallmark signs of steadily weakening figures on the RSI.

 

 

 

As it turned out, those negative momentum divergences continued to play out and in another report issued on Wednesday September 13th with Crude Oil at $68 per barrel, I pointed out a double top in Crude Oil noting, that Crude Oil was “in close proximity to key support near the $68.40 level (see next chart)”. At the time, I stated, “...the potential that a downside break below $68.40 could quickly lead to a bout of serious follow thru downside action, with Oil’s next major support being in the high $50’s."

 

 

 

Ultimately, I “sketched in” and set a downside target on a breakdown of $57 dollars for Crude, which on the nearby chart appeared to be a strong, longer range support. More recently, in my October 3rd newsletter update, I included yet another chart of Crude Oil, this time an hourly chart telling readers that Crude still had a bit further to go – near term, on the downside.

 

Using Elliott Wave analysis, (not shown on chart), I produced the following graph with Crude Oil at $58.80 at the time. In the report, I explained that Oil (1) need to rally toward $62 and then needed a second and final decline to a lower low near the $57.50 to $58 range, which at that point should mark the final low of the larger decline (see next chart). Updating that chart to the present time period, we find that the anticipated “bottoming sequence” for Crude Oil has taken shape right along the proper outline, with prices having rallied to a high of $61.49 on October 9th, followed by a decline to a low yesterday at $57.30.

 

While I still cannot rule out prices lingering in this area for another day or two, the overall appearance of the Oil chart is now that of a major bottom, with the initial recovery off the low, very likely to lift prices back up into the $64 to $66 dollar range over the next few weeks.

 

 

While it is true that Oil inventories are presently at very high levels, it is also true that:

 

1/ marginal capacity for Oil is extremely constrained, (Capacity Utilization at 97%, not 75% or 78% as in the 80’s and 90’s),

 

2/ global demand with China adding 180,000 new cars to the road PER week is well embarked on a new secular rise, and

 

3/ unlike the 1980s or 1990s when OPEC Oil cuts were ineffective in putting a “floor” under Oil, in the new reality of the 21st century, [accelerating global consumption cast against the backdrop of “virtually zero” spare capacity and the even larger specter of “Peak Oil” starting this year] OPEC is highly empowered and even small production cuts will rapidly shore up prices

 

= =

 

MORE Artcle, with all the charts : http://www.financialsense.com/editorials/b.../2006/1012.html

[drbubb]

High inventory levels, combined with skepticism about OPEC's commitment to production cuts, have helped to pull prices down by around 25 percent from the record high of $78.40 for U.S. crude hit in July.

 

But Goldman Sachs said inventories were progressively being eroded by stronger-than-expected demand.

 

"We continue to believe that the recent, lower oil price levels will prove short-lived, particularly as the lower prices have contributed to exceptionally strong demand growth in the U.S.," the investment bank wrote in a report.

 

It maintained its price forecast of $75.50 for U.S. crude next year.

 

http://money.cnn.com/2006/11/08/markets/oi...ered=2006110807

 

Update

 

The Oil index (USO) looks as if it has bottomed too ... update

[HollandPark]

USO should rally back to that blue line at some stage,

and then maybe back to retest the lows

 

- -

 

From Fortune, Oct. 30th, pg, 16, col.3:

 

"The current price for crude - $59 per barrel - is roughly where oil insiders have been predicting it would be if it weren't for all that hot money flowing into commodities. Last spring, energy consultant and Deloitte advisor Joe Stanislaw told FORTUNE that fundamental supply and demand factors suggested a price of about $50, with geopoltical factors adding $10 and speculators putting another $10 on top of that."

 

(Well, look: Prices peaked at $79, and then the geopolotics cooled, pealing off $10, and Hedge Funds disgorged speculative longs, pealing off another $10.- my comment)

 

Fortune goes on:

"Right now, the latest bet by traders is for a normal winter - if there's a sudden cold snap before Thanksgiving, expect a bump in crude."

 

(Well, Evelyn Garrish is talking about a "double-dip winter" with cold weather before and after a mid-winter warming.)

[drbubb]

(it may have looked crazy at the time):

 

Jul 14 2006 / Dr Bubb:

 

" As I have said before...

The World will be a better place If and When the USA discovers a new mission...

 

As a Country to be the Leader of Innovation in Alternative Energy.

 

To get there, we may need to see:

 

+ $200 Oil,

+ More failures in US political leadership,

+ A clear peak in Oil resources vs. Production,

+ A more widespread realisation that the current mission as "the world's policeman and consumer of last resort" is thankless, and will eventually bankrupt the USA "

 

/see: http://www.greenenergyinvestors.com/index.php?showtopic=611

[drbubb]

OIL is getting expensive again- or maybe Gold is too cheap