The 70 percent rise in crude oil prices from the lows of $27.1 per barrel to a high of above $46/b in a matter of three months is being driven by speculative activity—make no mistake about it. The speculators have latched on to every bit of rumour and news to bid prices higher, and this has nothing to do with the real fundamentals. However, speculation can boost prices only to a certain extent in the short-term. After this, the fundamentals take over. The extent of speculation is enormous, though the daily production of oil in the U.S. is around 9 million b/d, the WTI crude oil contract trades more than 100 times the produced quantity, as highlighted in this January 2016 post. The trading volume is generated by the algo traders, day traders, and scalpers who are in and out of their positions many times a day. Due to their enormous volume, they set the direction of prices in the short-term. However, these traders are neither involved in the production nor do they take physical delivery of oil; they are usually active only in the near-term contracts until expiry; after which the users of oil take deliveries. source: yahoo finance.
http://www.barchart.com/chart.php?sym=CL*0&style=technical&template=&p=DN&d=X&sd=&ed=&size=M&log=0&t=BAR&v=0&g=1&evnt=1&late=1&o1=&o2=&o3=&x=44&y=11&indicators=COTLC(13369344,26112,153);COTDLC(13369344,26112,153,16750848)&chartindicator_1_code=COTLC&chartindicator_1_param_0=13369344&chartindicator_1_param_1=26112&chartindicator_1_param_2=153&chartindicator_2_code=COTDLC&chartindicator_2_param_0=13369344&chartindicator_2_param_1=26112&chartindicator_2_param_2=153&chartindicator_2_param_3=16750848&addindicator=&submitted=1&fpage=&txtDate&sh=150=#jump It doesn't corroborate with what they say. Smalls are bearish since we've hit the low. Currently the path of least resistance is up. However large speculators are quite bullish, It looks like a squeeze since the HH's weak.
The worst thing is that if the oil price is even lower, the large companies will suffer significant losses.
Oil,is in an uptrend this pull back so far was buyable dont tuink, dont fight it. Sadly not rich enough to trade oil D1 chart wise, been very predictable so far.
If oil rises any further then it will be profitable for gas and oil wells to return to service in Canada, Texas and Louisiana. And if Iraq and Syria can ever get a grip on ISIS and the Taliban, then they would be able to increase their output. And now that Iran has been welcomed back onto the world scene, they should be reinvesting in their oil industry. It's been reported that they could be adding another 1MN barrels a day to the world market by the end of the year. A few months ago Venezuela had to import oil to meet their short term needs. Because Chavez put his friends in charge of the oil industry instead of people that knew what they were doing. If they ever get their act together (and it won't be anytime soon because the guy in charge was Chavez's protege) and reinvest in the oil industry, output should increase there as well. Increasing use of solar panels and building zero energy housing is also going to decrease the demand for oil products. Granted, most of the energy consumed by homes and businesses is produced by coal plants, natural gas, hydro and nuclear plants. But as energy becomes cheaper to produce at home (solar), electric cars will become more popular, eliminating the need for gas. And new fuel standards for cars and trucks have increased their mileage, reducing gas consumption. And China has been expanding their reach into the South China Sea under the pretense of a 500 year old map. But the real reason is not because of national boundaries and fishing rights, it 's for oil. The areas they have occupied.........invaded, stolen............are all rich in oil and natural gas. If they develop those oil fields it will decrease demand for oil from the ME and elsewhere. Unless China and the rest of the world economy begin to increase demand dramatically, it's not going too much higher. It might hit 50 or even 60 dollars a barrel but we won't see 100 dollars anytime soon, barring a war in the ME or something else significant. Just my .02 ------------ Turveyd..........What is D1 ? Sadly not rich enough to trade oil D1 chart wise, been very predictable so far.
D1 = Daily. Agree long term oil is probably going down and reason Saudi Arabia is floating idea of selling "a piece of their pie". Short term the trend is the trend.
Bullish Oil. Next week we make a Higher High. Toward 52.5. I'll buy a 50 Call paper option. Then the Fed will have to increase rates, To a oid hyper inflation. Then collapse.