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Oil Steadfast Near HighsOil remains at highs, after curbs on China Covid lockdowns have eased . Supply remains tight as OPEC is reluctant to increase oil production. Although they have agreed to boost production, which should help buffer skyrocketing costs per barrel, Saudi Arabian oil prices have continued to increase . We do appear to be seeing a bull wedge or triangle forming at highs which suggests that we may be mounting for another breakout. This would surely meet our next target of $122, and likely establish new relative highs for oil. If we retrace, we should find support at $116, then $113, and $111.
NYMEX:CL1!Long
by quantguy
No Love at the PumpsOil has picked up, testing relative highs. We seem to be having trouble reestablishing the $120's, with $119 being the upper bound for now. The Kovach OBV has picked up, but does not seem sufficient to indicate a significant rally to hit relative highs at $122. In fact, we are looking a bit top heavy so anticipate a retracement back to support at $116, $113, or $111. Any retracement should be considered purely technical and we have no reason to believe that oil will give up the $100's any time soon. Our next target is $122 if momentum reignites.
NYMEX:CL1!Long
by quantguy
2
The situation with oil is getting worse and worse...Up until a few days ago I believed oil had a chance of getting back down to 75-95$. It can still get all the way down there, but for the price to get there it would need traditional markets to crash badly. The current production is too low, the underinvestment in production is massive and the oil industry isn't incentivized to drill for new wells. At the same time the problem is getting larger and larger as there aren't enough refineries that can use oil to create other products like gasoline, and many of these refineries can't just take any type of oil and use it to produce stuff. OPEC+ has been consistently missing its targets and is unable to increase production, oil released from the SPR isn't able to alleviate these issues, while a significant supply is lost from Russia, Syria, Libya, Iran and Venezuela due to sanctions, wars or other issues. The recent announcement from the EU that there will an oil embargo just makes the situation worse, while at the same time tensions are getting worse and worse as 1 Iranian oil tanker was 'seized' by the US in Greece, and 2 Greek oil tankers were 'seized' by Iran. The more oil output that is lost, the worse the situation is getting, despite the fact that we already have significant demand destruction. If oil stayed around 110 while China had big parts of its population under strict lockdown, what is going to happen as it slowly re-opens? At some point things are going to get very ugly and the high oil prices are going to damage the global economy beyond repair, something that will force oil prices to come down. In some of my previous analysis I did mention some of the potential targets for oil, which could be at 200-300$, but for now the key target remains the 2008 ATH at 140-150$. In my opinion the market will take some time to break that level, but the financial melt down won't come until it gets around 250$. If we take inflation into account, the price of the dollar, as well as the growth of money supply and that of the global stock market capitalization, the 150$ peak in 2008 is now close to 200-250$, however the 150$ peak has psychological significance. As oil is now cheaper than back in 2008-2011, as the market has closed above the 2011 highs and as the structure is very bullish across all contracts is very bullish, the price of oil could go much much higher from here. Gasoline making new ATHs and has turned the 2008 ATHs into support. December contract formed an SFP but not that bearish. The average price of the next five months had a very strong close and there is nothing really bearish to see. Hence my first target for now is 145$, the second target after some consolidation below 145$ is 195$, and the final one where I'd start exiting and potentially shorting oil would be 245$.
NYMEX:CL1!Long
by BitcoinMacro
Oil Rally Lets off the GasOil has retraced a bit, after a fresh burst of momentum took us past 116. We appeared to be gunning for 122, but lost momentum in the middle of the vacuum zone, with several red triangles on the KRI suggesting that the rally was encountering resistance in this area. Subsequently, we smashed through 116, finding support just above 113. Currently, we are meeting resistance from 116. We are still bullish of oil, but it may range around these relative highs before momentum reignites.
NYMEX:CL1!Long
by quantguy
Oil Rallies Off Russian Oil BanOil has rallied significantly off news that the EU is planning to ban Russian imports of oil , despite the fact that Russia supplies 27% of the EU's oil and 40% of its gas. Crude oil prices soared off this news and we were able to smash through a relative high at $116. This was our target from earlier. Recall that last week, we noted oil's relative strength and set a target at $116. It is difficult to find justification for a signficant retracement, but a technical pull back should find support at $116 or $113. Our next target is $122, which would be signficant as this is a relative high.
NYMEX:CL1!Long
by quantguy
Economic Outlook on OilOil has been ranging in between $108 and $113, with consistent resistance at $111, which we have added as a new technical level. The value area has consolidated immensely, which suggests that we may be preparing for a breakout. There is no fundamental reason yet why we should see significantly lower oil prices, though China's renewed Covid lock downs weigh on demand. We anticipate strong support from $108 and $106, with $100 an absolute floor. If we can break past $113, our next target is $116.
NYMEX:CL1!Long
by quantguy
Oil Tests Relative HighsOil has extended gains, breaking through $106 and currently testing $108. We appear to be feeling out the range between $100 and $108, but there is a bull bias, and the Kovach OBV has picked up notably. If we are able to continue the rally, there is a vacuum zone to $111. We do appear to be facing resistance at the moment, confirmed by some red triangles on the KRI, so beware of a potential retracement, which should find support at $106, but may cross the vacuum zone again down to $101 or $100. The $100's should hold, but if not $95.24 has proven to be reliable floor price.
NYMEX:CL1!
by quantguy
Oil Breaks HigherOil has been edging up, first breaking through $106, then $108. The latter has consistently been an upper bound for oil, but just yesterday it was finally able to crack this level. We broke out but topped off at $111 or so, just under our next target at $113. We are registering resistance confirmed by red triangles on the KRI. However the Kovach OBV appears very strong, and oil seems to be holding its ground above $108, which should provide support. If not, we have $106 just below, then there is a vacuum zone down to $101. There is no reason to expect that we won't hold the $100's. Another burst of momentum could take us back to $113, then relative highs at $116.
NYMEX:CL1!Long
by quantguy
Can the Oil Rally Sustain??As discussed yesterday, oil formed an inverse head and shoulders pattern (with a slanted neck line) and broke out to higher levels, hitting our exact profit target of $106, where we are currently meeting resistance confirmed by a red triangle on the KRI. The Kovach OBV has picked up notably, but $106 is likely to be a barrier for now. Anticipate oil to range between $101 and $106 for now. If it breaks higher, $113 should be a ceiling for now. If we reject the $100's as we did earlier this week, then $95.24 should be a floor price.
NYMEX:CL1!Short
by quantguy
2
Oil Stabilizes in the $100'sOil has broken through resistance in the low 100's including 100 and 101, but momentum has fizzled before reaching our next target of 106. It appears that we are feeling out the price territory between 101 and 106, a fairly vast vacuum zone. Watch for oil to remain range bound between 101 and 106 as it establishes value here. If strong buying or selling comes through, then we should have support below from 100 and 101, but if that does not hold, then 95.24 is a very strong level and relative low. We anticipate 92.03 to be a floor price. If we can break through 106, then 113 is our next target.
NYMEX:CL1!
by quantguy
Three Reasons to Be Skeptical of Higher Oil Prices... For NowOil broke down lower off news that Biden will start to use US oil reserves to the tune of 1M barrels per day and also considered adding more ethanol to gasoline to fight soaring costs. This was enough to bring oil down from the $100 handle, albeit briefly. We found support just above our level at 96.88, about 100 ticks north at 97.78 before we saw a nice pivot back to the $100 handle. However, the Kovach OBV is still very bearish after this selloff, so we will need more momentum to come through if we want to solidify the $100's again. If we drop further, then 96.88, 95.24, then 92.03 are the next targets. It does appear that oil has priced in the news, so we are likely to stabilize and form a value area in the low $100's, with $106 a likely target if that is the case.
NYMEX:CL1!
by quantguy
Will We See Lower Oil Prices??Oil is hugging lows after Biden has announced that he will start to use US oil reserves and also considered adding more ethanol to gasoline to fight soaring costs. Crude promptly dropped from where it was meandering in the 106-113 range. We are still finding strong support at 101 and 100, which are strong technical and psychological levels. The Kovach OBV has turned bearish but has since flatlined. We will not be able to crack through these levels unless more momentum comes through. If it picks up, then 106 and 113 are the next targets which must be broken again before we can consider highs then our next target of 132.
NYMEX:CL1!
by quantguy
Oil Regains $100Oil has gotten a lift from the mid $90's back to the $100's. We were able to break through $101, and are currently ranging in the vacuum zone between $101 and $106. The Kovach OBV has picked up slightly as oil has gained momentum. It is likely that most of the geopolitical factors are priced in, so we might not see an aggressive rally back to highs, but a gradual progression is likely. We should see support from the base of the $100 handle, but if not, then we could retrace all the way back to $95. Our next target is $106, then there is a vast vacuum zone to $116.
NYMEX:CL1!Long
by quantguy
Oil Tests $100 AgainOil has continued its decline but the bleeding seems to have stopped for now as we have found support in the mid 95's. We have found support at $95.24 as confirmed by multiple green triangles on the KRI. Subsequently we have lifted to $100 which seems to be providing resistance at this point. The Kovach OBV is still bearish but does seem to be leveling off. If we are able to recover then $106 is our next target, otherwise we should find support again at $95.24. Watch out for the vacuum zone to $92.03.
NYMEX:CL1!Long
by quantguy
Oil Retraces, but Finds SupportCrude has dropped to $106, but is holding strong at this level. News of the potential for peace in Ukraine has already lifted stocks this morning, and will put further pressure on oil which has already retraced from highs nearing our target at $132. The Kovach OBV has slid quite a bit, suggesting a bear divergence. We will see if the $100's hold as exuberance over the Russia/Ukraine war deliquesces into the oil market. Watch $101 and $100. If those do not hold, we have a vacuum zone down to $96.88. If we somehow catch a bid then $116 is the next target and we are likely to see resistance there.
NYMEX:CL1!Short
by quantguy
1
Oil Slides off OPEC Production CooperationOil has retraced sharply off news that OPEC is planning to oblige the demands of the west and increase oil production . We are still holding onto the $100's, but dipped by double digit percentages down to 106, where we found support. Currently we are seeing a nice pivot back through 112, with the price currently in the vacuum zone between 112 and 116. Russia is consistently in the top 4 oil producing nations, so boycotting them will place further constraints on existing supply issues. Therefore, any selloff in oil is likely transitory. It is not likely we will give up the $100's any time soon and $101 is a likely floor for now. If momentum reignites, then $116 and $122 are the next targets before $132.
NYMEX:CL1!
by quantguy