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Energy & Commodities

Oil Prices Are Set To Rebound

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Posted by OiPrice.com

on Wednesday, 14 June 2017 08:35

UnknownThe latest selloff in oil prices have left speculators in a predicament: The fundamentals continue to look poor with unimpressive drawdowns in crude oil stocks, but there is a general consensus that the extension of the OPEC deal should push the market towards a rebalancing over the next few quarters.

What that means for short-term movements in prices is unclear. The unpredictability of today's oil market is leaving some investors burned by unexpected price gyrations. For example, just ahead of the recent selloff in prices last week, oil traders bought up bets on rising prices. Hedge funds and other money managers increased their bullish bets by 7.3 percent for the week ending on June 6, but prices plunged by 5 percent a day later.

Traders looking for some direction might want to consider the futures market, where a contango structure has reemerged. A contango, in which near-term oil futures trade at a discount to futures dated further out, is a symptom of oversupply. For example, two weeks ago, futures for December 2017 traded at a $1 per barrel discount compared to contracts for delivery in December 2018. That discount ballooned to $1.49 per barrel last week, according to Bloomberg, a sign that investors are growing more pessimistic about oversupply conditions this year. "Brent spreads are getting clobbered," Amrita Sen, chief oil market analyst at consultants Energy Aspects Ltd., told Bloomberg"The Atlantic Basin is awash in light crudes from Nigeria and Libya."



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Energy & Commodities

The Great Commodity Bear , Is It Finally Over ?

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Posted by Rambus Chartology

on Thursday, 08 June 2017 06:32

There is something happening in the commodities complex that has been going on for awhile now that needs to be addressed tonight. A subtle change actually started earlier this year and has been gaining momentum especially in the energy sector. I know for a lot of you, with the weak US dollar, you are thinking, “how could commodities be declining,” which goes against everything you have learned about how the markets are supposed to work. If the markets always behaved like everyone thinks they should then there would be no markets, because everyone can’t be right. That’s the nature of the beast we’re trying to tame.

Tonight I would like to show you some bearish rising wedges which have formed all over the place in the commodities complex. Many of the rising wedges took over a year to build out so that sets up a healthy decline. The bigger the pattern the bigger the move.

This first chart tonight is the ratio combo chart using the TIP:TLT to gauge if we are experiencing inflation or deflation. Earlier this year the ratio in black formed a small topping pattern just below the black dashed trendline, then had a quick backtest, and is now starting to gain momentum to the downside. When the ratio in black is falling it shows deflation. The CRB index along with the GDX are still in a downtrend with the CRB index being weaker than the GDX, as show by the 30 week ema.

TLT-TO-TIP-COMBO-768x869

 

....continue reading this report with 18 more charts HERE



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Energy & Commodities

Trump Bids Adieu to Paris Climate Agreement. What Does this Mean for Energy Investors?

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Posted by Frank Holmes - US Global Investors

on Tuesday, 06 June 2017 06:45

COMM-renewable-energy-06022017

Surprising no one, President Donald Trump announced his decision to withdraw the U.S. from the Paris climate agreement last week, highlighting the depth of his commitment to keep “America First.” Also surprising no one, the media is making much of the fact that the U.S. now joins only Nicaragua and Syria in refusing to participate in the accord.

Trump was under intense pressure from business leaders, politicians on both sides of the aisle, environmental activists, members of his Cabinet—even his own daughter Ivanka, reportedly—to stay in the agreement, but he made his decision with the American worker in mind. The Paris accord, Trump said, “is simply the latest example of Washington entering into an agreement that disadvantages the United States,” leaving American workers and taxpayers “to absorb the cost in terms of lost jobs, lower wages, shuttered factories and vastly demised economic production.”

This is the assessment of Secretary of Commerce Wilbur Ross, who went on Fox News to defend the decision. “Any time that people are taking money out of your pocket and you make them put it back in, they’re not going to be happy,” Ross said, making a similar argument to the one that prompted the Brexit referendum last year.



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Energy & Commodities

Is the Energy Rally Running out of Gas ?

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Posted by Rambus Chartology

on Thursday, 01 June 2017 07:15

Tonight I would like to update some charts for Natural Gas and oil which appear to be building out a topping formation. If these patterns play out there is a lot of room to the downside we can take advantage of. There has been a lot of backing and filling, but it looks like this may be coming to an end and we may finally get the impulse move down.

$NATGAS has been building out a 1 year H&S topping pattern and just recently completed the high for the right shoulder. This daily chart shows a blue 5 point bearish rising flag that broke below the bottom rail today. A backtest to the underside of the 5 point bearish rising flag would come in around the 3.18 area which would represent a low risk entry point to go short natural gas. The possible neckline is still quite a bit lower which would be another low risk entry point if the neckline gives way.

natgas-day-1

This next chart is a weekly look which shows a classic H&S top forming with the left shoulder and head building out inside the rising wedge, and the right shoulder forming on the backtest to the bottom rail of the rising wedge. Note how long the backtesting process took before it was finally completed. Most folks would have given up and moved on to something else, but sometimes having some patience can be rewarding. Patience would also have been required when the very symmetrical 2 year triple H&S top broke down and began consolidating the first leg down, building out the blue diamond. Each reversal $NATGAS has had since 2012 was accompanied by a H&S reversal pattern. As you can see, if our current H&S top plays out this move down is just getting started.



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Energy & Commodities

The Best Bull Oil Thesis You've Never Heard Of

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Posted by Seeking Alpha

on Wednesday, 31 May 2017 08:38

5006891 14961718469770 rId7Summary

AltaCorp in its May 26 report details a very contrarian bullish oil thesis.

They argue that the market is ignoring the crude quality difference between OPEC and US shale.

While US shale production continues to grow, the world will still be short of the crude grade that refineries want.

...continue reading AltaCorp's Contrarian View - OPEC vs US Shale; A Tale of Two (Very Different) Crudes



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