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Energy & Commodities

Understanding Crude Oil Behavior

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Posted by Nadia Simmons & Przemyslaw Radomski& Przemyslaw Radomski

on Wednesday, 14 February 2018 06:10

On Monday, oil bulls extended gains after Friday's invalidation of the breakout, which together with the buy signal generated by the Stochastic Oscillator suggest further improvement. A least at the first sight. But does watching the room through the keyhole give us a full picture of what's inside? We also think so, therefore, we invite you to analyze a broader picture of crude oil.

Let’s analyze the charts below (charts courtesy of http://stockcharts.com).

2018-02-13-wtic-D



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Energy & Commodities

Future U.S. Oil Production Will Collapse Just As Quickly As It Increased

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Posted by Steve St. Angelo - SRSRocco Report

on Thursday, 08 February 2018 06:07

While U.S. oil production reached a new peak of 10.25 million barrels per day, the higher it goes, the more breathtaking will be the inevitable collapse.  Thus, as the mainstream media touts the glorious new record in U.S. production that has both surpassed its previous peak in 1970 and Saudi Arabia’s current oil production, it’s a bittersweet victory.

Why?  There are two critical reasons the current record level of U.S. oil production won’t last and is also, a house of cards.  First of all, oil production profiles tend to be somewhat symmetrical.  They rise and fall in the same manner.  While this doesn’t happen in every country or every oil field, we do see similar patterns.  For example, this similar trend is taking place in both Argentina and Norway:

Argentina-Norway-Oil-Production-768x303

Here we can see that oil production increased, peaked and declined in a similar pattern in both Argentina and Norway.  However, many countries had their domestic oil industries impacted by wars, geopolitical events, and or enhanced oil recovery techniques that have resulted in altered production profiles.  Regardless, the United States experienced a symmetrical oil production profile from 1930 to 2007:



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Energy & Commodities

Bitcoin Carnage Continues But What Is Happening In This Market Is Truly Shocking

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Posted by KingWorldNews

on Monday, 05 February 2018 06:05

What is happening in the crude oil market is unprecedented.  Commercial short positions have now reached unimaginable levels (see stunning chart below).

Screen Shot 2018-02-05 at 7.05.28 AM

Meanwhile, Commercial Euro Shorts Hit All-Time Record! -----continue reading HERE



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Energy & Commodities

Commodities as Cheap as (or Cheaper Than) They’ve Ever Been

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Posted by Frank Holmes - US Global Investors

on Friday, 02 February 2018 19:18

Pay close attention to where commodities are relative to equities right now. Compared to the S&P 500 Index, materials are extremely undervalued, the most since at least 1970. This makes now a very attractive entry point—or as natural resource investors Goehring & Rozencwajg Associates writes in its quarterly report, there could be “a proverbial fortune to be made” if investors take advantage of this once-in-a-generation opportunity.

COMM-commodities-are-as-cheap-as-theyve-ever-been-relative-to-equities-02022018

“When commodities are this cheap relative to stocks, the returns accruing to commodity investors have been spectacular,” the firm continues:



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Energy & Commodities

A New Bull Market is Emerging

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Posted by Peter DeGraaf

on Friday, 26 January 2018 06:13

We’ve all watched in amazement, while the equities markets around the world have risen to new highs.  On Wall Street hardly a week goes by without a new record.  There comes a time however when a sector becomes so overbought, that smart money begins to leave and search for a sector that has been overlooked.   That moment is now at hand, as can be seen in our first chart – courtesy sources listed. 

chart one

This chart compares equities to commodities.  In 1970, 2000 and today, equities have become overpriced, while commodities are oversold and cheap by comparison.  In 1973, 1990 and 2008, oil and commodities became overbought and investors sold commodities and bought stocks.  If history repeats (and it often does), we are about to witness a massive switching from equities into commodities.  This trend may or may not include oil, since it is already in a bull market, but because of ongoing demand in Asia it will include such items as natural gas, copper, lithium, vanadium, zinc, and cobalt, and the stocks of the companies that mine and produce these commodities will be in great demand. 

http://www.goldseek.com/news/2018/1-25pd/chart%20two.jpg

This chart courtesy Zerohedge.com shows the average number of days in the US stock market between occasions where the index drops 5% or more is 92 days, all the way back to 1929.  In the mid-1960s there was a stretch without a 5% correction for 386 days.  In the mid 1990s the index went 394 days without a 5% correction.  And now (as of Thursday Jan 25th) we have gone a record 399 days without a 5% pullback.  So The S&P has NEVER been this over-valued, NEVER been this overbought, and NEVER gone this long without even a minor correction.   Odds are.....



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