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2日前
NY Crude Oil Futures (CL) »» Weekly Summary Analysis
By: Marty Armstrong | November 28, 2024
The NY Crude Oil Futures closing today at 7060 is immediately trading down about 1.46% for the year from last year's settlement of 7165. This price action here in December is reflecting that this is within the scope of a bearish reactionary move on the monthly level thus far.
Up to now, we still have only a 1 month reaction decline from the high established during October. We must exceed the 3 month mark in order to imply that a trend is developing.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Crude Oil Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2020 and 2009 and 2001 and 1998 and 1994. The Last turning point on the ECM cycle high to line up with this market was 2022 and 2018 and 2011 and 2000.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The historical broader tone of the NY Crude Oil Futures has been a bearish consolidation following the high established back in 2008. Since then, this market has created 2 reaction highs which have been unable to break this overall protracted bearish consolidating trend. Still, the major low was made in 2023 and the market has bounced back for the last year. The last Yearly Reversal to be elected was a Bullish at the close of 2023.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Nevertheless, it closed last year on the weak side down from 2022. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Looking at the indicating ranges on the Daily level in the NY Crude Oil Futures, this market remains moderately bullish currently with underlying support beginning at 7058 and overhead resistance forming above at 7148. The market is trading closer to the support level at this time. An opening below this level in the next session will imply a decline is unfolding.
On the weekly level, the last important high was established the week of October 7th at 7846, which was up 4 weeks from the low made back during the week of September 9th. Afterwards, the market bounced for 13 weeks reaching a high during the week of December 9th at 7142. Since that high, we have been generally trading down to sideways for the past 2 weeks, which has been a sharp move of 3.962% in a reactionary type decline. Nonetheless, the market still has not penetrated that previous low of 6527 as it has fallen back reaching only 6859 which still remains 5.086% above the former low.
When we look deeply into the underlying tone of this immediate market, we see it is cautiously starting to strengthen since the previous low at 6527 made 15 weeks .
Looking at this from a broader perspective, this last rally into the week of December 9th reaching 7142 failed to exceed the previous high of 7288 made back during the week of November 4th. That rally amounted to only five weeks.
Right now, the market is above momentum on our weekly models hinting this is still bullish for now as well as trend.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2021 while the last low formed on 2023. However, this market has declined in price with the last cyclical low formed on 2023 warning that this market remains weak at this time on a correlation perspective declining in both price and Momentum.
Some caution is necessary since the last high 7846 was important given we did obtain four sell signals from that event established during October. That high was still lower than the previous high established at 8767 back during April. This warns that the trend is weak moving forward.
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3日前
Natural Gas Weakens but Holds Trendline Support
By: Bruce Powers | December 27, 2024
• Testing Fibonacci and trendline support, natural gas hovers near 3.29. A decisive move below threatens uptrend, while above 3.45 signals renewed bullish momentum.
Natural gas fell to test support around a rising trend line on Friday with the day’s low of 3.29. The 78.6% Fibonacci retracement level is at 3.29 as well. An intraday bounce followed the 3.29 low and natural gas is attempting to end Friday and therefore the week, above the 20-Day MA, currently at 3.37. If it does, that will be slightly more bullish than if not.
Integrity of Price Structure Retained
Given that today’s low maintained the integrity of the uptrend relative to the trend line, it could be the completion of a pullback that is followed by strength. But what makes it interesting is that a drop below today’s low would question the integrity of the uptrend price structure as the trendline would be broken. Potential support around the 20-Day MA would already be broken prior to the trendline being reached. So, the bullish thesis would be proven wrong if there was a drop below today’s low.
Drop Below Today’s Low Would Be Bearish
A decisive decline below today’s low of 3.29 puts the recent interim swing low at 3.09 and the swing low at 2.98 (C, red) in view of being tested as support. Significantly, potential support around the 50-Day MA is also around the prior low, at 3.02. Together, a potentially significant support zone from 3.09 to 2.98 is identified.
Take note that the breakout from a symmetrical triangle pattern triggered above the 3.02 swing high. A test of that price area as support would be the second test following the triangle breakout and would follow the initial pullback to 2.98. Nonetheless, price behavior will lead the way forward by how it behaves around key price levels.
Strength Returns Above 3.45
The next sign of strength would be with a rally above today’s high of 3.45. That would put natural gas back above the 20-Day prior support line and in place to track higher. Initial resistance may be seen around the prior highs of 3.55 or the 2023 high of 3.64.
A long-term bullish signal was triggered only recently in natural gas as it broke out above the top of the triangle pattern at 3.02 on November 20. That advance also triggered a continuation of the rising trend that began from the February trend low. The subsequent rise above the 2023 peak provided additional evidence for the bulls as that rise initiated a longer bullish trend reversal signal.
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3日前
WTI Oil Gains Ground As Crude Inventories Decrease By 4.2 Million Barrels
By: Vladimir Zernov | December 27, 2024
Key Points:
• Natural gas pulled back from session highs after the release of the EIA report.
• WTI oil is moving higher as traders focus on falling crude inventories.
• Brent oil is trying to settle above the $74.00 level.
Natural Gas
Natural Gas 271224 Daily Chart
Natural gas pulled back from session highs as traders reacted to the EIA report, which showed that working gas in storage declined by -93 Bcf from the previous week, compared to analyst forecast of -99 Bcf.
If natural gas declines below the $3.20 – $3.25 level, it will head towards the next support at $3.00 – $3.05.
WTI Oil
WTI Oil 271224 Daily Chart
WTI oil gains ground as traders focus on the EIA report, which indicated that crude inventories declined by 4.2 million barrels from the previous week.
A move above the $70.50 level will push WTI oil towards the nearest resistance level, which is located in the $72.00 – $72.50 range.
Brent Oil
Brent Oil 271224 Daily Chart
Brent oil is moving towards the $74.00 level as traders stay bullish after the release of the EIA data.
From the technical point of view, Brent oil needs to climb above the psychologically important $75.00 level to gain additional upside momentum in the near term.
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3日前
No Time Left for You. The Energy Report
By: Phil Flynn | December 26, 2024
Time, time, time, time, time/ No time for a gentle rain/ No time for my watch and chain/ No time for revolving doors/No time for the killin’ floor/ No time for the killin’ floor
There’s no time left for you. No time left for you.
Guess who said that time is running out and Europe could be left out in the cold.
None other than Russian President Vladimir Putin .
Putin said there is no time left this year to sign a new Ukrainian gas transit deal.
Putin is blaming Ukraine who controls the pipeline that bring Russian gas to Slovakia, the Czech Republic and Austria and said he is open to using alternative routes around the Ukraine if they could get other countries to lift those pesky sanctions.
Ukrainian President Volodymyr Zelenskiy said he is ok with the continued transit of Russian gas on the condition that Moscow does not get paid for the fuel until after the war ends.
I am sure that Russian President Putin is not so wimpy to jump at “’loll gladly pay you Tuesday for a hamburger today, opportunity.”
Now it might be too late.
As Putin said yesterday that “There is no contract, and it is impossible to conclude it in three to four days.”
Of course, when it comes to these deals there is always time if they want to find it.
European gas prices are surging in panic.
Bloomberg reports that Benchmark futures jumped as much as 5% on Friday, the most in a week.
Bloomberg said that Central European nations that still buy Russian gas have floated alternative solutions to keep the fuel flowing across Ukraine, but President Volodymyr Zelenskiy has rejected any arrangement that sends money to Russian coffers while the war continues.
As things stand, there will be no transit of Russian gas from Jan. 1, Heorhii Tykhyi, spokesperson for Ukraine’s Ministry of Foreign Affairs, said on Friday.
Reuters says Here is what happens if Russian gas transit via Ukraine is completely turned off and whom will be affected most.
Russian gas supplies to Europe via Ukraine are relatively small. Russia shipped about 15 billion cubic meters (bcm) of gas via Ukraine in 2023 – only 8% of peak Russian gas flows to Europe via various routes in 2018-19.
Russia spent half a century building its European gas market share, which at its peak stood at 35%.
Moscow has lost its share to rivals such as Norway, the United States and Qatar since the Russian invasion of Ukraine in 2022, which spurred the EU to cut its dependence on Russian gas.
EU gas prices rallied in 2022 to record highs after the loss of Russian supplies.
The rally won’t be repeated given modest volumes and a small number of customers for the remaining volumes, according to EU officials and traders.
Reuters says that Austria still receives most of its gas via Ukraine, while Russia accounts for around two-thirds of Hungary’s gas imports.
Slovakia takes around 3 bcm from energy giant Gazprom (GAZP.MM), opens new tab per year, also about two-thirds of its needs.
The Czech Republic almost completely cut gas imports from the east last year, but began taking gas from Russia in 2024.
Most other Russian gas routes to Europe are shut including Yamal-Europe via Belarus and Nord Stream under the Baltic.
The only other operational Russian gas pipeline route to Europe is the Blue Stream and TurkStream to Turkey under the Black Sea. Turkey sends some Russian gas volumes onward to Europe including to Hungary.
WHY DOES THE UKRAINIAN ROUTE STILL WORK?
While remaining Russian gas transit volumes are small, the issue remains a dilemma for the EU. Many EU members such as France and Germany have said they will not buy Russian gas anymore but the stance of Slovakia, Hungary and Austria, which have closer ties to Moscow, challenges the EU common approach.
The countries, who still receive Russian gas, argue it is the most economic fuel and also blame neighboring EU countries for high transit fees imposed on alternative supplies.
Ukraine still earns $0.8-$1 billion in transit fees per year from Russian gas transit.
According to Reuters calculations, Gazprom’s total pipeline gas exports to Europe via all routes in 2024 have increased to 32 bcm from 28.3 bcm in 2023, when they collapsed to the lowest level since the 1970s.
Russia could earn around $5 billion on sales via Ukraine this year based on an average Russian government gas price forecast of $339 per 1,000 cubic metres, according to Reuters calculations.
Russia’s gas pipeline export monopoly Gazprom plunged to a net loss of $7 billion in 2023, its first annual loss since 1999, because of the loss of EU gas markets.
Russia has said it would be ready to extend the transit deal but Kyiv has repeatedly said it will not do it. Another option is for Gazprom to supply some of the gas via another route, for example via TurkStream, Bulgaria, Serbia or Hungary. However, capacity via these routes is limited.
Hungary has been keen to keep the Ukrainian route open but said it would continue to receive Russian gas from the south, via the TurkStream pipeline on the bed of the Black Sea.
The EU and Ukraine have also asked Azerbaijan to facilitate discussions with Russia regarding the gas transit deal.
A senior source at Azeri energy company SOCAR told Reuters on Friday that Moscow and Kyiv have failed to agree on the deal brokered by Azerbaijan to continue Russian gas exports to Europe via Ukraine.
AS far as oil, the market seemed to be disappointed that the EIA report was not as bullish as the API. Still the EIA as far as supply versus demand suggests a very tight market.
EIA reported that U.S. commercial crude oil inventories decreased by 0.9 million barrels from the previous week. At 421.0 million barrels, U.S. crude oil inventories are about 6% below the five-year average for this time of year.
Total motor gasoline inventories increased by 2.3 million barrels from last week and are about 3% below the five-year average for this time of year.
Distillate fuel inventories decreased by 3.2 million barrels last week and are about 7% below the five-year average for this time of year.
Total products demand d over the last four-week period averaged 20.4 million barrels a day, up by 1.3% from the same period last year.
Over the past four weeks, motor gasoline product supplied
averaged 8.7 million barrels a day, up by 2.1% from the same period last year.
Distillate fuel product supplied averaged 3.8 million barrels a day over the past four weeks, up by 4.8% from,
the same period last year.
Jet fuel product supplied was up 11.6% compared with the same four-week period last year.
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3日前
Crude Oil Continues to See Supporters
By: Christopher Lewis | December 27, 2024
• The crude oil market has been supported multiple times over the last several weeks, and it now looks like we are trying to get ready for a move to the upside. This move, while impressive, will more likely than not be a move we see in 2025.
WTI Crude Oil Technical Analysis
The West Texas Intermediate Crude Oil Market rallied a bit during the early hours on Friday as we continued to bounce around. That being said, I’m not expecting too much this time of year because after all, we are right in the middle of two major holidays and therefore liquidity will probably be a major issue.
However, looking forward, I do fully believe that the West Texas Intermediate Crude Oil market will rally a bit and perhaps even break above the $72.50 level. Once we break above the $72.50 level, then it’s very likely that we will continue to go much higher. Short-term pullbacks between now and then should see plenty of support near the $68 level as well as the $67 level, so do keep that in mind.
Brent Crude Oil Technical Analysis
Over in the Brent market, you can see that we initially did try to rally, but then pulled back a bit to show signs of hesitation as well. So therefore, I think it has to be thought of as a market that is doing everything it can to find its bottom, it just isn’t there. The WTI grade will probably continue to outperform anyway due to the fact that it’s a lot more heavily influenced by the United States than the Brent market, so I think that is part of your bifurcation here.
Nonetheless, I do believe that the Brent market has a significant amount of support below the $70 level and that’s something that needs to be paid close attention to. I do think that given enough time we could break towards the $76 level, possibly even reach towards the 200-day EMA eventually. We are in the midst of bottoming in the crude oil markets from everything I see, so really at this point in time I don’t have any interest in shorting these markets, and it’s worth noting that we have recently bounced from a major support level, going back a couple of years in both grades.
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4日前
Crude Oil Bull Flag Pattern Breakout Potential
By: Bruce Powers | December 26, 2024
• Crude oil continues to form a potential bull flag pattern, with a brief breakout today met by selling pressure. A decisive rally above 71.41 could trigger upside momentum and improved bullish sentiment.
Crude oil continued to trace out a small potential bull flag pattern on Thursday as it traded outside day and down for the day. It remains poised for a potential breakout of the flag that has been forming around support of both the 20-Day MA (purple) and a trendline (purple) falling across the top of recent consolidation.
A breakout above the top line of the flag triggered today but it was quickly hit with selling pressure that will likely leave crude oil down for the day and in a weak position. Nonetheless, if the integrity of the flag is maintained the potential for an upside breakout remains.
Flag Breakout Above 71.41
A decisive rally above the top of the flag at 71.41 will trigger a breakout. The prior interim swing high at 71.79 should then easily be exceeded if there is upside momentum. That would put the recent swing high at 73.27 as an initial upside target. However, a breakout of the bull flag would solidify the recent reclaims of the 20-Day and 50-Day MAs and set the stage for improved bullish sentiment. Higher initial targets following a flag breakout include the 61.8% Fibonacci retracement at 74.42 and the 78.6% retracement at 76.47.
Larger Patterns Show Downward Pressure
Stepping back to consider the larger pattern, the fractal nature of the market is shown by the recent small symmetrical triangle consolidation pattern that formed following a larger symmetrical triangle. On an annual basis, crude oil looks likely to close negative for 2024 and at a lower annual closing price than 2023.
This would be the second year in a row that crude ended the year lower than the year before. It reflects the bearish nature of the breakdown from the large symmetrical triangle in September and subsequent bearish small symmetrical triangle. The small triangle is considered potentially bearish since it is contained within a larger downtrend price structure, and it formed below prior support and now resistance that is represented by the lower boundary line of the triangle.
Price volatility has compressed the past couple of months during the consolidation phase. This could set the stage for a spike in volatility if the breakout from the small triangle starts to see greater interest. A bullish breakout of the flag would go a long way towards attracting buyers.
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4日前
Natural Gas Technical Signals Hint at Potential Price Pullback
By: Bruce Powers | December 26, 2024
• Natural gas rally shows signs of fatigue as prices approach key resistance levels. Technical indicators suggest a potential pullback, but the uptrend remains intact above the 20-Day moving average.
Natural gas struggled to retain recent gains following a possible false breakout above a rising trend channel. A double top pattern can be seen in the relative strength indicator (RSI) along the bottom of the enclosed chart, and the RSI has turned down. This also reflects a weakening of short-term momentum along with the potentially false breakout of the channel pattern. Whether these indications lead to a pullback remains to be seen.
Hits New Trend High of 4.01
Natural gas rallied to a new trend high of 4.01 on Thursday and generated another sequential higher daily high and higher low, the sixth day in a row. At the time of this writing, it continues to trade near the lows of the day, which was 3.67.
That is short-term support and if it is broken to the downside a drop to test support around the prior trend high of 3.56 is likely or a test of the 20-Day MA, currently at 3.37. The 20-Day line is a key dynamic support indicator for the near-term bull trend as it was tested and held as support on several days since the October swing low (red). That trend is marked by a rising ABCD pattern (red).
Above 20-Day Line is Bullish
If natural gas can retain a position above the 20-Day line, it has a chance to continue higher as the uptrend lower boundary would be retained. It is interesting to notice that there are several rising trendlines that cross above current price levels at approximately 4.39 and 4.45.
Those levels are within a potential resistance zone that begins around 4.33 to 4.42. That price level is the initial target from the red ABCD pattern shown on the chart. The crossovers also show possible resistance around the price zone. Therefore, it makes sense to expand the target zone to 4.33 to 4.45.
Bullish Outlook Retained
Notice that natural gas could continue to advance higher and stay within the top channel line and internal rising trend line. Together, they generate a potential rising wedge pattern. One possibility to consider is that natural gas could proceed and stay within the boundaries of the pattern to eventually reach the 4.33 target without breaking through either boundary line of the wedge.
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4日前
China’s Holiday Stimulus. The Energy Report
By: Phil Flynn | December 26, 2024
Did you find any Chinese bonds in your stockings? Nothing says holidays like a big stimulus package from China.
Whether you are working or celebrating Boxing Day, whatever that is, oil is getting a boost from talk of a massive amount of economic stimulus from China.
Reuters is reporting that China is planning to sell a record 3 trillion Yuan ($411 billion) of special treasury bonds in 2025.
They are looking to use the cash to make investments in key technology and advanced manufacturing sectors. China is also adding consumption subsidies and business upgrade assistance
That means investments in artificial intelligence and data centers. That means a lot of energy demand which we’ll probably be powered mainly by coal and natural gas and good old-fashioned oil.
China is also adding consumption subsidies and business upgrade assistance.
Oh, sure you can look at the fact that we saw oil supplies tightening once again and the oil glut that some were predicting is turning into a very tight physical market.
As most folks were travelling to their holiday destinations, the American Petroleum Institute (API) reported a 3.2 million barrels drop in crude oil inventories.
Distillate inventories, which include diesel and heating oil—fell by about 2.5 million barrels and we did see gasoline inventories jump by 3.9 million barrels to get prepared for what iss supposed to be a record-breaking Christmas travel week.
Today we got the Energy Information Administration version of the ‘Petroleum Status Report at 10:00.
I was delayed of course because of the Christmas holiday.
But one of the things we must focus on is the fact that inventories are getting very tight, that is why the hedge funds have flipped to the long side of the market.
Hedge funds are being enticed to the wrong side of the market because the reality of tight supplies can no longer be ignored.
We must go back and talk about all these predictions of an oil glut that weighed on prices. It obvious now that it is not happening.
The and the market has been rather subdued when it comes to geopolitical risk factors it’s very clear that we have a supply deficit based upon the weekly data it also means that if a geopolitical disruption happens, we could get a major price spike. The Iranian Tasnim News Agency, affiliated with the Iranian Revolutionary Guard Corps, admits that at least 80 of Iran’s 600 power plants are currently not operating due to a lack of natural gas to manage them.
Energy demand in the future is going to be critical for the economy of the next century.
Meeting the strong demand from data centers and artificial intelligence is going to be key. Countries that face that reality are going to be very successful.
Zerohedge is reporting that “in a bold move to transform Argentina into a global energy powerhouse, President Javier Milei introduced the “Argentine Nuclear Plan” on Friday, with the goal of harnessing nuclear energy as a core component of the nation’s future. The plan outlines the construction of Small Modular Reactors (SMRs), compact nuclear units designed to provide power to commercial sectors and other large-scale operations.
Interfax is reporting that diesel fuel shipments to Russia’s domestic market grew by almost 6% in 2024, while gasoline shipments rose 2%. Commenting on how the temporary ban on gasoline exports affected the country’s fuel market, a ministry spokesman said it “made it possible to additionally sate the domestic market with supply and prevent spikes in both retail and wholesale prices.”
“Targeted use of restrictive measures makes it possible to manually find a balance between supplying the market and utilizing oil refining capacity. Amid the saturation of the market and need to maintain oil refinery capacity utilization in the winter season, a decision was made to lift the ban on gasoline exports for producers. However, for non-producers the ban remains in effect until the end of January 2025. This measure makes it possible to support oil refining without risks for domestic market supply,” the spokesman said.
Deputy Prime Minister Alexander Novak said earlier that the authorities expect to forego the use of tools such as oil product export restrictions in future. “I’m confident that we will use instruments such as banning or opening shipment for export less. This is, after all, quite a non-market instrument. Given sufficient gasoline production, we will use market instruments,” he said. Novak recalled that new gasoline production capacity will go into operation in Russia in the next few years and this will make it possible to balance the situation on the market. Until then, new restrictions could be imposed. “Everything depends on the market situation,” he said.
Natural gas prices after a big spike have pulled back a little bit and we’re continuing to get mixed predictions about the weather in January.
Fox Weather is reporting that “As millions begin the trek home from the Christmas holiday, they’ll be dealing with wet conditions to close out the week with rain and thunderstorms expected across a good swath of the country.
Meanwhile, snow levels are dropping in the West as more storms hammer the coast and dump heavy rain that could lead to flooding in some spots. The storm is expected to bring the first round of rain and thunderstorms to the South on Christmas Eve and Christmas Day before rapidly dissipating on Thursday. However, right on its heels, a new storm will come out of the Rockies and into the southern Plains, bringing a renewed round of rain and thunderstorms, according to the FOX Forecast Center.
The Wall Street Journal is reporting that “America’s Big Natural-Gas Footprint Is About to Get Even Bigger”
“Drillers are looking ahead to new export hubs and easier regulations under the coming Trump presidency”
The articles starts by saying that “Toby Rice, who leads one of America’s largest natural-gas producers, says the “Drill, Baby, Drill” mantra that resurfaced during the presidential campaign is passé. Now, it is all about “Build, Baby, Build.”
Natural-gas investors are looking ahead to potential growth after a year in which historically low prices dinged profits and drilling plans. At the same time, the Biden administration questioned the benefits of making the U.S. liquefied-natural-gas-export machine—the world’s biggest—even bigger.
As climate advocates have increasingly warned of planet-warming emissions, President Biden has ramped up environmental rules and directed unprecedented sums into clean energy, rarely discussing record oil-and-gas output.
Now, with President-elect Donald Trump set to take office, climate concerns are out. New LNG hubs are slated to come online. The White House-in-waiting has promised to fast-track future infrastructure that could help gas companies funnel fuel to new buyers at home or abroad—potentially locking in another era of development.
“Political force has overwhelmed market forces,” said Rice, chief executive of Pittsburgh-based EQT, which produces gobs of gas in the Marcellus Shale stretching across Appalachia. “Let market forces work.”
The U.S. natural-gas market has been constrained in recent years by public aversion to new pipelines and an arduous permitting process that Washington has tried and failed to overhaul. Rice, who recently visited Capitol Hill to talk up natural gas, says this Congress could be different.
A must Read! Pick up the Journal.
These storms could be severe, especially in the afternoon, with damaging wind and a few tornadoes being the primary threats. This isn’t expected to be a repeat of Dec 26, 2015, when 12 tornadoes, including an EF-4, ripped across north Texas.
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5日前
Crude Oil Bullish Signals Emerge Amid Flag Formation
By: Bruce Powers | December 24, 2024
• Consolidation continues for crude oil, but a bullish breakout above 71.41 could signal momentum toward key resistance and higher price targets.
Crude oil has slowly been showing improving bullish signs recently as it continues to consolidate around the 20-Day (purple and 50-Day (orange) MAs. It began an upside breakout from consolidation on December 11 and has largely stayed above the line since. Notice that support around the trendline has been tested on multiple days following the bull breakout, and each day since has ended above the line.
In fact, a small bull flag trend continuation pattern has been generated and it is shown on the chart with two small parallel lines. It becomes interesting given its bullish position within the larger pattern and the fact that the consolidation phase followed a sharp one-day rally on December 11. That rally created a pole for the overall flag pattern.
Small Bull Flag Pattern
Of course, this is not the perfect flag pattern given that it is established within a larger consolidation pattern and that it is relatively small. Nonetheless, it can provide clues as to what might happen next. As noted, the flag has formed around support of the falling trendline, which is bullish behavior. In addition, it is around support of the 20-Day MA, which crossed above the trendline only yesterday, and it has also turned back up slightly. This is also bullish behavior.
On Tuesday, today, crude strengthened within the flag pattern as it rose above the highs of the prior two days. And it closed at its second highest closing price within the flag formation, as well as above the 50-Day MA for only the second time since November 22. Since the initial breakout of consolidation on December 11 has failed to follow through to the upside, maybe it will happen following a breakout of the flag.
Bull Breakout Above 71.41
A decisive rise above the top of the flag at 71.41 triggers a bullish breakout that should see momentum improve enough to easily bust through the prior interim swing high at 71.79 and possibly the November 7 swing high at 73.27. Higher targets include the 61.8% Fibonacci retracement at 74.42 and the 78.6% retracement at 76.47. Also to be considered as potential resistance are the two boundary lines from a large symmetrical triangle and the 200-Day MA at 76.23.
Support Needs to Hold Above 68.82
The above bullish outlook begins to change on a drop below the bottom of the flag at 68.82. That would put the nearby lower boundary line of consolidation that starts from the September trend low of 65.65, at risk of being broken.
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5日前
Natural Gas Retains Bullish Momentum into New High
By: Bruce Powers | December 24, 2024
• A long-term triangle breakout drives natural gas higher, with bullish momentum reinforced by rising patterns and successful retests of prior resistance levels.
Natural gas regained its bullish posture on Tuesday as it rallied to a slightly higher trend high of 3.96. And it closed strong, near the highs of the day. Yesterday’s high was 3.94 with a weak close. Therefore, the pattern of higher daily highs and higher daily lows has been retained prior to the Christmas Holiday.
Today’s bullish price action negates yesterday’s one-day bearish candle, and it generated a daily close above the 3.85 to 3.87 resistance zone seen on the chart, and above the top line of a rising trend channel. These are all indications that demand remains strong, and it prepares natural gas for a continuation of the rising trend.
Looking for Additional Bullish Signs
Nonetheless, further signs of strength are needed. Watch for a decisive rally above today’s high of 3.96. Natural gas would then be heading towards the 161.8% extended target for a rising ABCD pattern at 4.06 (purple). After that, it looks like the next potential resistance zone begins around 4.33.
That price level is an initial target from another and smaller rising ABCD pattern (red). There are several other targets slightly higher from there around 4.18. Higher up is the 38.2% Fibonacci retracement of the full decline that started from the August 2022 peak at 4.77.
Long-term Bull Breakout Dominates
A decisive break out of a long-term symmetrical triangle pattern was triggered on November 20. The first pullback following the breakout completed at the recent 2.98 swing low. Notice that the pullback successfully tested prior resistance (breakout area) as support, including the purple 20-Day MA.
This tells us to pay attention to the relationship between the price of natural gas and its 20-Day MA. In addition, the pullback completes the initial phase following a bull breakout and sets the stage for a bullish continuation that could see an acceleration of momentum given the long-term nature of the triangle formation and long-term trend breakout.
Strength in Rising Trend
Besides the characteristics of the triangle breakout, the bull trend that starts from the February 2024 market bottom at 1.52 (orange), triggered a bullish continuation on a rise above 3.16 recently. The fractal nature of the advance can be seen in the three rising ABCD patterns that measure different portions of the rising trend. Moreover, last week’s breakout above the 2023 trend high at 3.64 showed improving demand for natural gas.
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6日前
Crude Oil Continues to Build Basing Pattern
By: Christopher Lewis | December 24, 2024
• The oil markets are all slightly positive in the early hours of Tuesday, as the thin conditions persist. However, this is a market that should continue to look somewhat solid, as the demand will almost certainly pick up with central bank easing.
WTI Crude Oil Technical Analysis
The West Texas Intermediate crude oil market has shown itself to be somewhat positive in the early hours on Tuesday as it looks like we are trying to grind our way toward the $72.50 level again, the $72.50 level is a significant resistance barrier, so I think it does take a little bit of effort to finally get above there, but if and when we do, I think we really start to take off. Over the last several months, we’ve been building a bit of a base in this market, and now the question is, will we get some type of momentum? Short-term pullbacks, for me at least, are going to continue to be buying opportunities.
Brent Crude Oil Technical Analysis
The Brent market, of course, looks very much the same and is testing the crucial 50-day EMA. The 50-day EMA, of course, is an indicator that a lot of people pay attention to. And with that being the case, I suspect it’s probably only a matter of time before we start to see people chase. If we can break above the $76 level, I think that opens up the next leg higher.
Short-term pullbacks in the Brent market much like in the WTI market will continue to attract buyers looking to get a little bit of value here in a market that I think ultimately will start to take off to the upside early next year as central bank liquidity measures probably drive up the need for energy. Regardless, I don’t have any interest in shorting.
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6日前
T’Was The Last Energy Report. The Energy Report
By: Phil Flynn | December 24, 2024
T’Was the Last Energy Report before Christmas, as bears had more doubts, and they changed positions with just a click of their mouse.
The hedge funds put on bull positions with care and hoped that their equity still would be there.
A net long position the newspaper read, the largest in a year; caused bear traders some dread.
With the war in Ukraine and a Russian price cap, Iranian sanctions could cause a bear market trap.
Supply and demand is now starting to matter; as we have less of the first and more of the latter.
Even when it seemed the oil might crash. It turnaround higher and flew like a flash.
The trend on Brent is now starting to go as global oil inventories are exceedingly low.
When my wondering eyes did appear, OPEC plus extends cuts for most of next year.
They made the decision so lively and quickly; I knew in a moment it might do the trick.
US output is starting to wane as Bidens energy policies are really to blame. He gave power to OPEC who I will call out by name.
Yes Iran! Yes Iraq! Now Kuwait and Algeria! Yes Venezuela! And UAE! And Qatar and Nigeria! Libya and Ecuador may have their backs to a wall, but Saudi Arabia will bide to stand tall. Just go away, please go away just go away all!
The American People just won’t let this fly, they wanted to drill again in a blink of an eye. Make America Great again they stewed and elected Donald Trump to make his dance moves.
And then, when elected, stocks went through the roof/ Drill baby Drill will have its moment of truth. America’s Energy fortunes will be turning around and hopes for world peace will start to rebound.
With energy dominance afoot. Our enemies’ plans will all go kaput. US oil and gas will put us on track and stop Iran’s funding for terror attacks.
Trumps will make it simple; play ball and be merry; or be sanctioned and get your whole economy buried.
Oil projects won’t be tied up like a bow and he will fast tract approvals if you spend enough dough.
The oil producers won’t be kicked in their teeth, and can now just their jobs be giving, What a sigh of relief.
Bidens regulators would give them a kick in the belly while codling foreign producers which seemed a little bit smelly.
Yet Trump Is now back like a jolly old elf, and I am Singing YMCA is spite of myself.
Trumps wink of his eye and the twist of his head should give the oil patch confidence that they have nothing to dread.
Now America can go back to work, knowing someone in the White House will put Americans first.
Trump went to his plane, just like a missile and salute the soldiers before their dismissal.
But I heard him exclaim, he walked out of sight. Make America Great Again and to all a good night!
Still our soldiers are fighting in land far away and we must remember to pray for them each passing day. It is for you and I that they put up this incredible fight; so to them and to all of you Merry Christmas and goodnight.
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7日前
Natural Gas Price Forecast: Potential Pullback Looms
By: Bruce Powers | December 23, 2024
• Resistance at trend highs and top channel lines suggests natural gas may see a short consolidation or correction before attempting further upside targets like 4.06.
Natural gas continued its rally earlier in Monday’s trading session as it briefly rose above a target zone before finding resistance at a new trend high of 3.94. That high led to a pullback that put it in a position to close weak relative to the day’s trading range, and down for the day. Moreover, today’s closing price is likely to also be below the prior trend high of 3.83. Given the bearish reaction to a new trend high today, it looks possible that the 3.85 to 3.88 target zone eventually had an influence. Nonetheless, follow-through will provide additional clues.
Short-term Outlook Falters
Note that for the most part trading today in natural gas has stayed above prior resistance at 3.64. That was the 2023 high and top of a large symmetrical triangle pattern. Therefore, it potentially was an impactful breakout that should eventually see a continuation to the upside. However, in the short term the possibility of a pullback exists and improves on a daily close below 3.64. The target zone that was breached today consisted of the 38.2% Fibonacci retracement at 3.85 and the 127.2% extended target for a rising ABCD pattern (orange) at 3.87.
False Channel Breakout
It is not just the bearish reaction to the target zone, however that is a cause for concern, resistance was also seen around the top channel line of a rising trend channel. Notice that on Friday natural gas touched the line specifically as resistance as the high of the day at 3.83 was at the line. Arguably, the top channel line could be moved a little higher and touch the November swing high rather than the October swing high. In that case, the argument for short-term resistance is amplified.
Watch Price Action Around 3.56 and 3.0
A correction, if it were to occur, could take the form of relatively sideways consolidation or a deeper pullback. The rise above the top of the channel is an indication that prices may be getting too far from the mean and due for a pullback and realignment. Other price levels to watch besides the 3.64 high include the most recent trend high at 3.56 and the 20-Day MA trend indicator at 3.32. If a rally above today’s high occurs before a correction, then the next upside target is 4.06.
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7日前
Natural Gas Continues to See Elevation Despite Pullback
By: Christopher Lewis | December 23, 2024
• The natural gas market pulled back a bit in the early hours of Monday, in what I think would be profit taking more than anything else, with Christmas being on Wednesday.
Natural Gas Technical Analysis
Natural gas pulled back during the trading session on Monday, but as you can see, the market is likely to continue to see buyers coming in to pick up value. However, keep in mind that there is a lot to be asked of the market this time of year. If we are heading into the holidays and expecting a massive bull run to continue, I think a day or two of calming down makes quite a bit of sense for the natural gas market, which should open up the possibility of being bought near the $3.40 level.
If we break down below there, then the market really could break down significantly, but ultimately, you’ve got a situation where traders will have to try to find some type of bounce to get involved in. We just do not have enough of the momentum left or perhaps even the volume left in the market to continue going higher. All things being equal, I like this market, but I want to see a drop a bit in order to find some value.
Longer term, I do anticipate that the natural gas market could very well go to the $4 level, but it’s going to take a while to get there. The $4 level, of course, is a psychologically important figure that will cause some noise and, of course, probably some options barriers to show up. So, the market is going to struggle to break above that region. All things being equal, I remain bullish this time of year, but I also recognize that you don’t want to just jump in and chase the trade right away.
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7日前
Crude Oil Looks for Momentum in Base Building
By: Christopher Lewis | December 23, 2024
• The crude oil market continues to see a lot of sideways action, but at this point on the calendar, it makes a lot of sense that we are simply waiting for the holidays to get out of the way.
WTI Crude Oil Technical Analysis
The West Texas Intermediate Crude Oil Market did initially try to rally during the trading session on Monday, but has given back some of the gains to show a little bit of hesitation, but that’s not a huge surprise. Quite frankly, this is a market that really hasn’t been doing much for a while and therefore, I think you have to look at this through the prism of building a base maybe or just killing time. take your pick.
With that, I am looking at this through the prism of whether or not we can build up enough momentum to finally go higher. But I think over the next couple of days, and perhaps even into the new year, it’s going to be difficult. If we can clear the $72.50 level, and I think we will eventually, the market goes much higher, perhaps looking towards the $78 level. Short term pullbacks continue to see plenty of support, especially near the $67 level and I think that support level extends all the way down to $65. So pretty impressive.
Brent Crude Oil Technical Analysis
Over in the Brent market, it’s very much the same situation. Brent looks like it’s got support down at 70, and therefore we need to pay close attention to that as well. All things being equal, this is a market that I think you look at through the prism of buying on the dips, as buying on the dips offers value here. But again, I think you probably have a hard time getting overly aggressive. This time of year, it’s more or less about building a base for a move to the upside, but we are sitting right at a major support level from several years in both grades, so I think we’re in the process of trying to bottom out.
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1週前
Baby Its Cold Outside. The Energy Report
By: Phil Flynn | December 23, 2024
While oil stays locked in a boring trading range a coming cold blast has sent natural gas soaring to a the highest price since January of 2023. This comes as shoppers rush home with their treasures fighting a very cold Christmas holiday week. Even as it appears we will get a warm-up after Santa arrives, the potential for a polar backlash in January has the natural gas market on the rise.
Nat Gas supplies in Europe are also on the rise.
John Kemp Energy points out that “Europe’s gas inventories have reverted close to average for the time of year after an unusually fast depletion since the start of this winter wiped out most of the surplus inherited from the unusually mild winter of 2023/24.
Inventories across the European Union and the United Kingdom were just 46 terawatt-hours (TWh) (+5% or +0.42 standard deviations) above the prior ten-year seasonal average on December 18. The surplus had narrowed from 122 TWh (+13% or +1.38s) when winter started on October 1 and 277 TWh (+71% or +2.03s) at the end of last winter, according to storage data from Gas Infrastructure Europe. Stocks have depleted by 201 TWh since October 1, the fastest draw for eight years, and compared with a ten-year average of just 126 TWh.
The tightness of natural gas supplies in Europe raises questions as to what Europe is thinking about when it comes to energy security.
Reuters is reporting that – Qatar will stop shipping gas to the EU if member states strictly enforce a new law cracking down on forced labour and environmental damage, Energy Minister Saad al-Kaabi told the Financial Times in an interview published on Sunday.
The Corporate Sustainability Due Diligence Directive, approved this year, requires larger companies operating in the European Union to check whether their supply chains use forced labor or cause environmental damage and to take action if they do. Penalties include fines of up to 5% of global turnover.
Oil Price reported that “it’s happened again. The Druzhba pipeline—Russia’s aging oil lifeline to Europe—has gone silent, leaving Hungary, Slovakia, and the Czech Republic without their usual crude oil fix. According to sources, the culprit is a “technical issue” at a Russian pumping station in the Bryansk region. Transneft, the pipeline’s operator, has yet to speak on the issue, but Belarus has confirmed the disruption, saying its refineries are dipping into reserves to keep running.
This pipeline, capable of carrying 2 million barrels per day (bpd), has been trucking along with just 300,000 bpd lately, thanks to sanctions and Europe’s pivot from Russian energy. Still, for nations like Hungary and Slovakia—granted waivers by the EU due to their heavy dependency—this hiccup is a headache.
After the big spike up on Sunday night natural gas has pulled back him with the warm upcoming there could be some more profit taking but if the forecasts hold up January is going to be wickedly cold and there could be a squeeze back to the upside of natural gas the hedge funds have added to their long position so they must be convinced that the cold is coming and it’s going to settle in from long wintry nap’
Oil is stabilizing in a trading range, but the products are moving higher cold temperature is shed increase the demand for diesel we should also see the markets start to establish an uptrend soon because the predicted glut of oil supplies just isn’t happening.
This comes as Iran is trying to dump 20 million barrels of oil before sanctions really start to bite this may be Iran’s best chance to get rid of some oil before the Trump sanctions hit.
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1週前
Natural Gas: Colder January Forecast Drives Futures Higher – $4.300 Next?
By: James Hyerczyk | December 22, 2024
Key Points:
• Natural gas futures hit 2024 highs, surging 14.27% on colder weather and LNG demand spikes.
• EIA reports 125 Bcf storage draw; inventories fall to 3,622 Bcf as winter heating demand intensifies.
• Futures break key $3.647 resistance on weekly chart, signaling potential for $4.300 rally.
• LNG exports hit 15 Bcf/d, tightening supply further as global demand for U.S. gas remains strong.
• Colder January forecasts drive bullish sentiment – traders brace for higher heating demand.
Nearby Futures Rocket to 2024 High on Cold Weather and LNG Demand
Nearby U.S. natural gas futures surged last week, closing at $3.748/MMBtu, marking a 14.27% gain for the week. This advance to a new front-month 2024 high was driven by colder weather forecasts across major consuming regions, strengthening bullish sentiment. Liquefied natural gas (LNG) exports hitting 15 Bcf/d added further upward pressure, tightening supply and supporting the rally.
The Energy Information Administration (EIA) reported a 125 Bcf withdrawal from storage for the week ending December 13, bringing inventories down to 3,622 Bcf. Despite stocks remaining 20 Bcf above last year’s levels and 132 Bcf above the five-year average, the sizable draw highlights increasing heating demand. Production held steady at 103.8 Bcf/d, but with winter demand outpacing supply, futures found support at higher price levels.
Weekly Natural Gas
On the weekly chart, natural gas futures decisively breached the October high of $3.647, confirming a breakout above key resistance. This move signals the potential for further gains, with the next significant resistance target near $4.300.
The $3.647 level, previously a notable resistance point, now serves as critical support following last week’s close. Traders are expected to defend this area on any pullbacks, reinforcing the bullish technical structure. A sustained break below $3.647, however, could shift momentum, exposing futures to declines toward $2.977, the next key support zone.
Colder January Forecasts Stoke Heating Demand
Forecasts for January continue to point toward below-average temperatures, bolstering expectations for stronger heating demand. A cold front is anticipated to grip the Midwest and Northeast through the weekend, further increasing consumption as homes and businesses ramp up heating.
LNG exports remain a major driver of supply-side pressure, with feed gas demand hitting 15 Bcf/d as European and Asian buyers secure shipments. Additionally, freeze-off risks in the Gulf of Mexico and northern production regions are adding uncertainty to output, fueling further bullish sentiment. These supply-side constraints, combined with higher global demand, are likely to sustain elevated prices.
Traders Set Sights on $4.300 as Cold Grips Market
With natural gas futures clearing $3.647, the path toward $4.300 appears increasingly viable. A continuation of cold weather patterns, alongside tightening inventories and strong export activity, supports a bullish outlook into January.
In the event of a retracement, $2.977 will be closely monitored as primary support. Failure to hold this level could see futures test $2.588 by early spring, though prevailing fundamentals favor continued upside. Traders are positioning for stronger demand through January as colder weather drives increased consumption, reinforcing bullish momentum in the weeks ahead.
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1週前
WTI Crude Oil CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | December 22, 2024
• Following futures positions of non-commercials are as of December 17, 2024.
WTI crude oil: Currently net long 232.8k, up 51.4k.
Last week, oil bulls defended crucial support at $66-$67, which for more than three months routinely attracted buying interest, closing at $71.29. For months, West Texas Intermediate crude was rangebound between $71-$72 and $81-$82. Easing back into the range has proven difficult, and this continued.
This week, WTI began the week with an intraday high of $70 on Monday and headed lower, finishing down 2.6 percent to $69.46/barrel. Bulls are on the defensive but deserve the benefit of the doubt so long as $66-$67 is intact.
In the meantime, US crude production in the week to December 13 decreased 27,000 barrels per day week-over-week from record 13.631 million b/d. Crude imports increased 665,000 b/d to 6.6 mb/d. As did gasoline inventory which grew 2.3 million barrels to 222 million barrels. Stocks of crude and distillates, on the other hand, went the other way – respectively down 934,000 barrels and 3.2 million barrels to 421 million barrels and 118.2 million barrels. Refinery utilization fell six-tenths of a percentage point to 91.8 percent.
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1週前
NY Crude Oil Futures (CL) »» Weekly Summary Analysis
By: Marty Armstrong | November 21, 2024
The NY Crude Oil Futures closing today at 6946 is immediately trading down about 3.05% for the year from last year's settlement of 7165. This price action here in December is reflecting that this is within the scope of a bearish reactionary move on the monthly level thus far.
Up to now, we still have only a 1 month reaction decline from the high established during October. We must exceed the 3 month mark in order to imply that a trend is developing.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Crude Oil Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2020 and 2009 and 2001 and 1998 and 1994. The Last turning point on the ECM cycle high to line up with this market was 2022 and 2018 and 2011 and 2000.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The historical broader tone of the NY Crude Oil Futures has been a bearish consolidation following the high established back in 2008. Since then, this market has created 2 reaction highs which have been unable to break this overall protracted bearish consolidating trend. Still, the major low was made in 2023 and the market has bounced back for the last year. The last Yearly Reversal to be elected was a Bullish at the close of 2023.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Nevertheless, it closed last year on the weak side down from 2022. Pay attention to the Monthly level for any serious change in long-term trend ahead.
From a perspective using the indicating ranges on the Daily level in the NY Crude Oil Futures, this market remains moderately bullish currently with underlying support beginning at 6937 and overhead resistance forming above at 7051. The market is trading closer to the support level at this time.
On the weekly level, the last important high was established the week of October 7th at 7846, which was up 4 weeks from the low made back during the week of September 9th. Afterwards, the market bounced for 13 weeks reaching a high during the week of December 9th at 7142. Since that high, we have been generally trading down to sideways for the past week, which has been a sharp move of 4.200% in a reactionary type decline. Nonetheless, the market still has not penetrated that previous low of 6527 as it has fallen back reaching only 6842 which still remains 4.826% above the former low.
When we look deeply into the underlying tone of this immediate market, we see it is currently still in a weak posture.
Looking at this from a broader perspective, this last rally into the week of December 9th reaching 7142 failed to exceed the previous high of 7288 made back during the week of November 4th. That rally amounted to only five weeks. Right now, the market is neutral on our weekly Momentum Models warning we have overhead resistance forming and support in the general vacinity of 6787. Resistance is to be found starting at 6974.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2021 while the last low formed on 2023. However, this market has declined in price with the last cyclical low formed on 2023 warning that this market remains weak at this time on a correlation perspective declining in both price and Momentum.
Some caution is necessary since the last high 7846 was important given we did obtain four sell signals from that event established during October. That high was still lower than the previous high established at 8767 back during April. This warns that the trend is weak moving forward.
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1週前
Natural Gas Long Term Bullish Reversal Triggers
By: Bruce Powers | December 20, 2024
• Natural gas rallies above key resistance, confirming bullish reversal signals on multiple time frames and opening the door for extended gains toward 4.33.
Natural gas spiked above the October 2023 swing high of 3.64 on Friday before finding resistance around the top rising parallel channel line. The day’s high at the time of this writing was 3.83. Although there was an intraday pullback following the 3.64 high, natural gas continues to show strength as it remains within the top third of the day’s price range.
The breakout above the 3.64 high has been decisive and shows strong momentum. It further confirmed the upside breakout of a large symmetrical triangle pattern that triggered on November 20. A strong closing price to end the week relative to the day’s price range may point to a continuation higher heading into the next week. Moreover, a close today above 3.64 is needed to confirm the bullish breakout.
Long-term Bullish Reversal
Today’s high was very close to completing a 38.2% Fibonacci retracement of an interim downswing, at 3.85. That price level is joined by 3.87, which is the 127.2% extended target for a rising ABCD pattern (orange). Together, they create a potential resistance zone from 3.85 to 3.87. The 38.3% long-term Fibonacci target was established following the February 2024 bottom.
Nonetheless, the breakout above the 3.64 swing high produces a bullish trend reversal signal on the larger time frame. The larger price patterns have greater potential significance. Therefore, the possibility of a more aggressive rally in natural gas increases following a daily close above 3.64. Since it is Friday, this would also produce confirmation on the weekly time frame.
Higher Targets Move into View
What looks interesting is that there is only an interim target identified if the 3.87 price level is exceeded. A smaller rising ABCD pattern (purple) shows a 161.8% Fibonacci extended target for the CD leg of the pattern at 4.06. From there the next potential upside target looks to be up at 4.33. Another smaller rising ABCD pattern (red) targets 4.33, its initial 100% target. Nonetheless, in the shorter term a pullback is always a possibility.
Watch Monthly Chart Closing
In addition to today’s long-term bullish trend reversal signal, natural gas has a chance of confirming the bullish trend reversal signal on a monthly chart by ending the year above 3.64. That would confirm the bullish reversal on the monthly time frame. An initial long-term target is up at the 38.2% Fibonacci retracement level measuring the full downtrend that began from the 2022 high.
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1週前
Crude Oil Continues to See Sideways Action
By: Christopher Lewis | December 20, 2024
• The crude oil market continues to see a lot of sideways action, as the market continues to wait for January to make any real move. At this point, the market is likely to continue to see more of a base building operation.
WTI Crude Oil Technical Analysis
The West Texas Intermediate Crude Oil Market dropped a bit during the early hours on Friday, but you can see we’re still very much stuck in the same range we had been in. So, it does make a certain amount of sense that we just hang around this area.
The time of year, of course, is going to be somewhat illiquid and therefore, I think you’re going to see West Texas crude oil hang around this 50 day EMA for the next several sessions, unless, of course, something external happens, you know, some geopolitics out of the Middle East or something to that effect. Once we get into January, we’re going to have to keep an eye on this $72.50 level, because I think a break above there kicks off the recovery for oil.
Brent Crude Oil Technical Analysis
Brent looks very much the same, a little weaker, of course, because it’s more of a global grade of crude oil. $70 underneath is a massive support level. $76 above is significant resistance. If we can break above that, then I think we could go looking to the $80 level.
All things being equal, this is a market that I just don’t have any interest in trying to get too big in at the moment, but I do realize it’s very likely that we are in the midst of trying to build up enough pressure to finally break to the upside. When you look at the longer term charts, we are at a massive support level now in both grades and of course, inflation will drive up the price of crude oil anyway. So, I think we are setting up for a fairly decent spring of 2025. But as things stand right now, we’re just killing time. If you’re a short-term trader, you’ve enjoyed buying dips as the market has offered plenty of opportunity for you.
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1週前
Snow Go. The Energy Report
By: Phil Flynn | December 20, 2024
Oh, the weather outside is frightful, but the nat gas moves delightfully. And since we’ve no place to go,
Let it snow, let it snow, let it snow. It doesn’t show signs of stopping, as the temperatures are still dropping. The lights are turned way down low to save some dough, let it snow, let it snow, let it snow.
The natural gas market leads the energy report because let’s face it, oil is kind of boring. Oil is still stuck in a new higher trading range, but now is acting like its wants to hibernate until after the Holidays. Yet natural gas will not have that luxury as winter weather and below normal temperatures are sending prices higher.
Fox Weather is reporting that the coldest air in nearly 2 years is coming to Northeast. The Fox Forecast Center eyes the potential for snow across the northeast on Friday and the Arctic plunge that follows. Temperatures begin to fall on Saturday but will be majorly felt Sunday morning through Monday with some of the coldest air the Northeast has seen in nearly two years.
Not only is Fox Weather predicting that, but some weather forecasters are also predicting that January in the US may be the coldest we have seen 2019. You remember Jan 2019 nat gas traders, don’t you? That was when a polar vortex brought arctic air to the Midwestern United States and Eastern Canada and record low temperatures to many areas, and some all-time record lows. In Wisconsin, the polar vortex caused record low temperatures in Madison and Milwaukee, and wind chills as low as -55°F in Waukesha.
In fact, that was just the type of weather that Neil Cavuto loved to send me out in to do live shots in, mainly because I think he was jealous of my fury winter coat! As many of you have heard, Neil is leaving Fox News. I just want everyone to know that Neil is genuinely one of the nicest and classiest professionals in all of television and I think the world of him. It’s not just me but everyone that had the pleasure of meeting him or working with him say the same. I wish him all the best and he will be missed.
Reuters is reporting that President-elect Donald Trump said on Friday that the European Union may face tariffs if the bloc does not cut its growing deficit with the United States by making large oil and gas trades with the world’s largest economy. The EU is already buying the lion’s share of U.S. oil and gas exports, according to U.S. government data, and no additional volumes are currently available unless the United States increases output, or volumes are re-routed from Asia – another big consumer of U.S. energy.
Now back to the oil prices. I think the reason why oil prices are under pressure is the stock market even though the fundamentals for oil are looking bullish based on supply and demand.
Concerns on the Federal Reserve’s dot plot and concerns about a potential government shutdown is weighing on market sentiment. Concerns about Chinese oil demand has been a familiar story this year as well. But Zerohedge is reporting the last time China 1Y bond traded below 1%, Lehman had just filed for bankruptcy. Bond market convinced Beijing to unleash mother of all monetary stimulus and/or QE. Commodities are so far unaware.
Also, Iranian sanctions may be starting to hurt Iran Bloomberg is reporting that, “The volume of Iranian oil stored on tankers at sea has swelled to the highest level since late July, as broadening US sanctions disrupt flows of the OPEC producer’s crude to China. The amount of oil held in floating storage was 16.82 million barrels as of Dec. 15, according to data from Kpler. Nearly two-thirds is stashed on tankers off the eastern coast of Malaysia, a key area of the supply chain where Iranian crude is often transferred to other ships for transit to Chinese ports. The question is why it took so long?
We think oil will find support in this area. The lows should be in for the quarter.
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2週前
Crude Oil Tight Range Signals Potential Volatility Ahead
By: Bruce Powers | December 19, 2024
• Crude oil struggles to retain breakout momentum, consolidating near key MAs. Volatility looms as price tests pivotal levels, including 71.41 resistance.
Crude oil continued to consolidate just above the 20-Day MA on Thursday. It broke out of a consolidation pattern last week and has since struggled to retain momentum from the breakout. Nonetheless, it remains above the top trend line of the pattern that marked the top of consolidation, and it remains above the 20-Day line that is now converging with the trendline. Subsequently, an additional sign of strength was seen on a move above the 50-Day MA.
Stuck With Range From 69.42 to 71.41
Two key near-term price levels to watch include potential support around the 20-Day MA, now at 69.42, and resistance at last week’s high of 71.41. Although a decline below the 20-Day line is a sign of weakness, the top trendline is also nearby and can be watched in conjunction with the moving average line as a potential support area. In this case, both moving averages are being used as a guide, but they are within a consolidation pattern, so their current significance is not the same as if crude oil was in a trending environment.
Breakout Above 71.41 Leads to 73.27
If the 71.41 high is exceeded, the November 22 swing high becomes the next target, and it will likely be reclaimed. A breakout above 71.41 would confirm strength and should increase the chance that the price of crude can keep rising. Also, on the larger time frame weekly chart (not shown), the 20-Week MA at 71.35 matches the November high pivot giving it a greater significance if a breakout occurs.
If the 71.41 high is exceeded, then the 50% retracement area at 72.97 would be the next upside target. It matches with the November swing high at 73.27. Further up is the 61.8% Fibonacci retracement at 74.42, followed by the bottom and top boundary lines of a large symmetrical triangle pattern. Around the same price zone is the 78.6% retracement level at 76.47.
Lower Volatility, Leads to Higher Volatility
Since crude has been consolidating recently into a tight trading range, there is the potential for a spike in volatility once the range has been cleared. A somewhat downward bias remains given the series of lower swing highs and the breakdown from a large symmetrical triangle pattern at the beginning of September. The impact of the pattern and breakdown is still being felt given that recent consolidation has occurred below the triangle.
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2週前
Natural Gas Breakout Signals Bullish Momentum Toward Higher Targets
By: Bruce Powers | December 19, 2024
• Natural gas signals a bullish continuation with a breakout 3.56, targeting Fibonacci resistance at 3.85 and 4.06 if today’s close confirms the move.
Natural gas triggered a trend continuation signal on Thursday as it broke out to a new trend high of 3.59. It continues to trade near the highs of the day at the time of this writing and may hit a new high before the day’s close. Therefore, there is a chance for confirmation of the breakout with a daily close above the prior trend high of 3.56.
Recently, natural gas established that the near-term remains in place as it successfully tested support around the 20-Day MA and established a higher swing low at 3.09. Today’s close will likely retain strength by ending in the top third of the day’s trading range.
First Pullback Following Breakout is Complete
The first pullback following the breakout of a large symmetrical triangle pattern completed at the December 4 swing low of 2.98. That was around the triangle breakout area of 3.02 and it sets the stage for a bullish continuation as prior resistance was tested as support. Today’s breakout occurred two days following a reversal day established on Tuesday, which also generated a higher swing low.
Support at Today’s Low of 3.39
Near-term support is at today’s low of 3.39. A decline below that price could lead to another retest of support around the 20-Day MA, currently at 3.27. As noted previously, the 20-Day line was successfully tested as support on several days recently. Support was indicated by the daily closes above the line, even though earlier the price of natural gas had traded below the 20-Day line. Of course, a key support area is the interim swing low from Tuesday at 3.09 because it generated a higher swing low and holds the second point of a rising trendline.
First 3.64, then 385
A daily close above 3.56 will confirm today’s breakout. There could be a clear pickup in momentum that takes natural gas straight to test resistance around the top of the triangle pattern at 3.64. But given strength indicated following the symmetrical triangle breakout, that price level is expected to be exceeded. Notice that following the November 20 breakout, natural gas quickly took out prior swing highs at 3.16 and 3.09.
That was a sign of strength that should return once the 3.56 high is exceeded. Initial higher targets would then be anchored around a 38.2% Fibonacci retracement level at 3.85. Higher up is an extended target from a rising ABCD pattern (purple) at 4.06, followed by an initial target from a smaller ascending ABCD pattern (red) at 4.33.
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2週前
The Natural Gas Market Continues to See Buyers
By: Christopher Lewis | December 19, 2024
• The natural gas markets continue to see a lot of buyers out there every time it dips, as the season continues to attract more buyers with the idea of the colder temperatures in the United States driving up demand overall.
Natural Gas Technical Analysis
The natural gas markets initially tried to rally a bit during the trading session on Thursday breaking above the $3.40 level. The market has then pulled back just a bit, but I think you’ve got a situation where traders are going to be looking at this through the prism of whether or not we can find enough momentum to finally launch. We are most certainly pressuring the upside, and I do think that given enough time, that’s probably exactly what happens.
This time of year is typically pretty bullish for natural gas anyway, so not a huge surprise or stretch to think that we would see this market rally. Short term pullbacks at this point in time will continue to be interesting buying opportunities all the way down to at least the $3 level. The 50 day EMA currently sits right around the $2.85 level and is rising, so think of that support area near the $3 level as a zone of support, if you will. That being said, I have no interest in shorting this market anytime soon because quite frankly, this time of year it’s just dangerous to do that with natural gas.
I also would watch my leverage though, because natural gas will move on the latest weather report. It just so happens this year, it’s been a little cooler than normal in the Northeastern part of the United States, so that’s had a major impact here. If we can take off from here, the $3.50 level will be the first level that people pay close attention to, but after that, we’re probably going to go and try to get to the $4 level.
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2週前
Crude Oil Continues to Find Buyers
By: Christopher Lewis | December 19, 2024
• The crude oil markets have found buyers on Thursday, as the market continues to make an argument for a turnaround in the trend. However, we are looking at the holiday season coming, and therefore it is pertinent to recognize that liquidity could be an issue.
WTI Crude Oil Technical Analysis
The West Texas Intermediate crude oil market rallied quite a bit in the early hours on Thursday as we have almost wiped out all of the selling pressure from the FOMC meeting on Wednesday. At this point in time, it does look like oil is trying to do everything it can to launch, but one of the biggest hurdles it’ll face won’t necessarily be resistance, it’ll be the fact that we are heading towards the holiday season. So, with that being the case, you have to look at this through a buy on the dip type of scenario.
If we pull back from here, the $67 level is support followed by the $65 level. But we also have to keep an eye on the $72.50 level above for significant resistance. I do think eventually we break above here, if for no other reason than inflation. But this time of year, it’ll be interesting to see if we can build up that type of momentum.
Brent Crude Oil Technical Analysis
Brent is a bit of a laggard, but it looks pretty strong during the trading session on Thursday as well and this reflects the difference between the US economy and pretty much everybody else in the world.
That being said, this market will rally right along with West Texas Intermediate crude oil given enough time and I think it is also in the process of bottoming for what could be a reasonably significant move early next year. I would be cautious about betting the farm here though, because quite frankly, we are going to have a couple of weeks of very illiquid trading. So short term pullbacks probably offer buying opportunities, but I wouldn’t get too aggressive, at least not until we get into January.
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2週前
The Last Market Standing. The Energy Report
By: Phil Flynn | December 19, 2024
After the Fed raised its dot plot and took interest rate cuts off the table for the foreseeable future, most commodities like gold and silver got crushed. The markets freaked out a bit after the Fed projected the benchmark lending rate falling to 3.9% by the end of 2025, equivalent to a target range of 3.75% to 4% higher than the market was expecting. Yet despite a higher dollar index, oil stood tall among commodities and stock markets that were melting down like Frosty on a hot winter day. Perhaps because the bullish fundamentals are getting harder for the market to ignore.
The weak demand narrative took a big hit after the Energy Information Administration reported total US oil demand of 20.4 million barrels a day, up by 1.3% from the same period last year and the fact that refineries were operating at 91.8% of their operable capacity last week. If demand was so bad, then why would refiners be doing that? If global demand is so bad, then why did we export a near record 4,895 million barrels of oil last week? If demand is so bad, then why did we import 6.6 million barrels per day last week, which was 665,000 barrels per day from the previous week?
If demand is so bad, then why are inventories of oil products so low? John Kemp Energy put the data in perspective. He points out that our refined fuel inventories for the three major transport fuels (gasoline, distillate and jet) are around 17 million barrels (-4% or -0.99 standard deviations) below the prior ten-year seasonal average so far in December. He points out that gasoline stocks have been particularly low (-1.24 standard deviations) with a smaller deficit in distillate (-0.91 standard deviations) while jet fuel stocks are in surplus (+1.39 standard deviations.
The other narrative is that U.S. oil production is going to continue to rise. And while that may be true when Donald Trump gets in office, the actual data so far seems to suggest that U.S. oil production has plateaued. The EIA reported that oil production came in at 9.289m million barrels a day which is just slightly below where oil production was a year ago.
The other reason other than drill baby drill that President Trump may keep oil prices down, we could also get an oil peace dividend. The possibility that we could get a ceasefire in the war with Ukraine is looking more likely as Russian President Vladimir Putin says he is ready to talk to President Trump on Ukraine. Putin also said that, “Putin: we’re ready for talks with Zelensky if he’s elected.” And that, “There are no pre-conditions for discussions”
Yet at the same time Putin wants to negotiate with the art of the deal maker from a position of strength. Reuters is reporting that Russian President Vladimir Putin on Thursday suggested a missile ‘duel’ with the United States that would show how Russia’s new Oreshnik hypersonic ballistic missile could defeat any U.S. missile defense system. Addressing Western skepticism about the Oreshnik, Putin suggested that both sides select a designated target to be protected by U.S. missiles. “We’re ready for such an experiment,” Putin said. In fact, maybe we could take it a step further and make this a new Olympic Event. I mean it might be better than all the blood being shed in Ukraine.
Biden for his part wants to spend as much money as he can on green energy projects perhaps to repay them for their unwavering support. Besides if you throw enough taxpayer dollars to the walls maybe something night stick. Then again… Oil Price reports that, “The Biden administration is rapidly approving green energy loans to solidify progress on the U.S. green transition before Trump’s inauguration. The Department of Energy’s Loan Programs Office is working to finalize as many loans as possible but faces criticism for the rushed process.” And why wouldn’t the rushed process be facing criticism, especially with some very high-profile failures in the green energy spending space.
Oil Price writes, “The Loan Programs Office at the Department of Energy (DoE) is working to finalize as many loans as possible before the change of government in January, as its future looks uncertain. During Biden’s leadership, the office announced around $54 billion in loans or loan guarantees, which is just a small portion of its total lending power, for projects such as the Rivian electric car factory in Georgia and a massive power line in the Midwest. However, the office has closed just $13.5 billion of the deals to date. Kennedy Nickerson, a former policy adviser to the loan programs office, stated, “They see the writing on the wall… They want to get out as much money as possible just to safeguard as much progress as they can.”
Progress? What progress? Why have car companies lost billions on electric cars with all of the government kickbacks? Where are the charging stations? Why is the world burning more coal than ever? John Kemp Energy wrote that, “Global coal production and coal-fired electricity generation are both on course to hit record highs in 2024, despite the accelerating deployment of wind, solar and other renewables. Coal production exceeded 9 billion tonnes for the first time in 2023, doubling in less than three decades, according to the Energy Institute’s Statistical Review of World Energy.
Nearly two-thirds of production was concentrated in China (52%) and India (11%); production from Indonesia (9%), the United States (6%) and Australia (5%) took the total share to more than 80%. China, India and Indonesia have all boosted production significantly over the last ten years even as output from the United States and Australia has dwindled. China’s production increased by a further 83 million tonnes in the first eleven months of 2024 compared with the same period in 2023. India has also boosted output by 66 million tonnes since the start of the year compared with the same period in 2023. Faster output from China and India has more than offset a decline of 55 million tonnes so far this year in the United States, putting global production on track to set a record.” So now if we can just throw another 55 billion dollars out there then maybe, just maybe!! Well, never mind.
Oil and products look like they are basing as we continue to close above key moving averages. Seasonally the price of oil boots up the end of December 13 out of the last 15 years according to the Moore Research Center. Unless the stock market gets totally wrecked, I expect that lows are in for the year and into the first quarter of next year. Get Hedged!
Natural gas is getting another bounce on cold weather. The Fox Weather Channel reminds us that the coldest air of season so far is to invade the northern US just before Christmas. Today the EIA released its report, and we expect to see 116 bcf withdrawal.
And despite Energy Secretary Jennifer Granholm prediction that LNG exports could increase the price of natural gas less than the cost of inflation, the reality is that US LNG exports are going to be a major part of the economy.
U.S. LNG export capacity is poised to double in next 5 yrs according to S&P Global. They say it will support 500,000 jobs per year and add $1.3 trillion to GDP by 2040. The US has some of the cheapest natural gas prices on the planet and is going to encourage even more jobs and manufacturing to come back to the United States.
The demonization of the US oil and gas industry by the Biden administration is one of their major failures and one of the reasons why they were soundly voted out of office.
Still you better keep up on this weather pattern because it could have a huge impact on natural gas prices. I think the best way to do that is to download the Fox Weather app.
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2週前
Natural Gas Targets New Highs, Resistance at 3.56 Looms
By: Bruce Powers | December 18, 2024
• Momentum in natural gas shows promise, with support at 3.09 and rising MAs signaling potential for a sustained move above resistance at 3.56.
Natural gas rose to a daily high of 3.44 on Wednesday before stalling its ascent and pulling back intraday. The advance followed yesterday’s wide range reversal day and triggered a bullish continuation. However, a daily close above Tuesday’s high of 3.39 is needed to confirm strength. So far, it looks like that may not happen today as natural gas is currently trading below that price level.
The day’s price range was relatively narrow and was largely contained in the top third or so of yesterday’s range. This is a minor sign of strength that can be given slightly greater weight if today ends above yesterday’s high.
Signs Correction Complete
The recent retracement low on December 4 was at 2.98. That decline completed a 61.8% Fibonacci retracement at 3.02 and returned to the breakout area of a large symmetrical triangle pattern. This is classic bullish behavior as a prior resistance zone was successfully tested as support and an advance followed. The 20-Day MA (purple) has done a good job of marking dynamic support for the uptrend since it was reclaimed on October 29.
Recently, it was tested as support on multiple days, including yesterday. Although natural gas fell through the 20-Day line on six days recently, beginning with the December 4 low, it managed to close above the line each day. So, there was a fast recovery, which points to underlying demand.
Strong Momentum Needed for Breakout
There is the potential for a continuation to new trend highs, but the attempt to break out to new trend highs was cut short last week as resistance was seen around 3.56. That is where resistance was seen following the initial bull breakout on November 20. Tuesday’s reversal day showed strength that now needs further follow-through. Momentum will need to be strong enough during this rally to break through 3.56. Otherwise, natural gas could consolidate a bit before it is ready to attempt a trend continuation breakout.
Near-Term Support at 3.09 Needs to Hold
On the downside, a drop through Tuesday’s low of 3.09 could lead to a retest of the 2.98 price zone and a decline below it. Also, a daily close below the 20-Day MA would be one sign of weakness. It is interesting to note that the rising 50-Day MA (orange), now at 2.88, is close to converging with the top trendline across the top of the triangle and it will likely be above in the coming days. That would improve the chance that support would be seen at or above the 50-Day line if a deeper correction develops.
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2週前
Feeding The Crisis. The Energy Report
By: Phil Flynn | December 18, 2024
Oil prices are back on the rise after the January options expired and the American Petroleum Institute (API) reported a larger than expected 4.7-million-barrel crude oil drawdown. Yet behind the day-to-day grind of fluctuating prices there is a more concerning backstory of the coming energy crisis that no one in the current administration wants to deal with. In fact they want to make it worse.
Outgoing Energy Secretary Jennifer Granholm says the, “Natural Gas Act has given the U.S. Secretary of Energy the responsibility to evaluate whether authorizations for the export of liquefied natural gas to non-free-trade-agreement countries is consistent with the “public interest.” That determination includes a wide variety of factors including impact on American consumers, workers, and the environment. We have now finalized our update of various pieces of analysis for public comment.
Granholm says that, “I want to take this opportunity to highlight five key findings and considerations that I think are especially relevant to help guide future Secretaries of Energy in making decisions about whether applications are in the public interest. Today’s publication reinforces that a business-as-usual approach is neither sustainable nor advisable. First, the pace of growth of U.S. natural gas exports in recent years is truly astounding and many analysts say continued growth on this trajectory will quickly outpace global demand. By itself, this rapid growth to date – and the continued growth we expect under existing authorizations – recommends a cautious approach going forward. U.S. LNG exports have already tripled over the past five years, will double again by 2030, and could double yet again under existing authorizations. The quantities already approved for export equate to roughly half of the U.S.’s total current natural gas production today. In 4 of 5 modeling scenarios included in today’s study, the amounts that have already been approved will be more than sufficient to meet global demand for U.S. LNG for decades to come.
Second, while these dramatically increasing LNG exports generate wealth for the owners of export facilities and create jobs across the natural gas supply chain, our public interest review requires comprehensive economic analysis. The U.S. Department of Energy’s (DOE) updated study finds that a wide range of domestic consumers of natural gas – from households to farmers to heavy industry – would face higher prices from increased exports. The study put forward today finds that unfettered exports of LNG would increase wholesale domestic natural gas prices by over 30%. Unconstrained exports of LNG would increase costs for the average American household by well over $100 more per year by 2050. We have recently lived through the real-world ripple effects of increased energy prices domestically and globally since the pandemic. Middle and low-income households already face energy bills that are too high. In parts of the South, the export-induced price increase would put some households over the energy burden threshold, further challenging their ability to meet basic needs.
Yet this assessment by Granholm is out of touch with reality and is a jaded view that could lead to real disasters for the US economy and the globe that are already stressing over past energy policies like Granholm is espousing. Not only are we getting another warning from the North America Electric Reliability Corp. (NERC) in their 2024 Long-Term Reliability Assessment that most of the US electric grid faces potential energy shortfalls beginning as early as next year but also a scathing response from the American Gas Association to the Biden administration’s pre-Christmas report on American liquefied natural gas (LNG).
Let’s start with the AGA. In a release the AGA said, “The Biden Administration’s pause on American LNG exports was a mistake that resulted in uncertainty for the market, for investors, and for America’s allies around the world,” said AGA President and CEO Karen Harbert. “This report is a clear and inexplicable attempt to justify their grave policy error. America’s allies are suffering from the weaponization of natural gas and energy deprivation and any limitations on supplying life essential energy is absolutely wrong-headed. We look forward to working with the incoming administration to rectify the glaring issues with this study during the public comment period.
Now back to the report from NERC that said that, “Trends identified in NERC’s 2024 Long-Term Reliability Assessment that warns that over half of the continent is at elevated or high risk of energy shortfalls over the next 5 to 10 years. They warn that generator retirement plans continue over the next 10 years, electricity demand and energy growth are climbing rapidly. New data centers, which have the potential to consume enormous amounts of power and can be built relatively quickly, are driving much of the explosive demand growth. Electrification in various sectors and other large commercial and industrial loads, such as new manufacturing facilities and hydrogen fuel plants, are factoring into higher demand forecasts. In fact, they point out that, “Demand growth is now higher than at any point in the last two decades, and meeting future energy needs in all seasons presents unique challenges in forecasting and planning,”
John Moran of Moran Logistics paints a sober outlook. To put it in perspective how large the shortfall ,John estimates that, “The United States is short the equivalent of 36 nuclear power plants. That estimate has no room for growth or any other actions such as manufacturing being forced to the US through tariffs he’s concerned that we don’t have the capacity to build anywhere near this he said it will take five to seven years perhaps 10 years to build out the capacity for artificial intelligence. On the flip side he’s worried because China is building 437 coal fire plants as we speak yet he warns here in the United states regulatory burdens have put us behind the 8 ball. We are closing coal plants faster than our ability to replace them, and the regulators are putting roadblocks up to increase capacity by approving natural gas or nuclear power plants.
This comes as fears of power shortages across the pond are growing as winter is not being as forgiving as it has been it past years. Bloomberg reports that UK wind power generation reached a fresh record on Tuesday, sending electricity prices plunging below zero. Bloomberg says that wind output peaked at 22,360 megawatts during the evening, breaking the previous high reached just a couple of days.
Which brings us back to the oil market, which grudgingly has been moving higher and closed above some key technical areas. The reluctance to breakthrough the 100-day moving average did cause some selling that was enhanced by option expiration yet the strong rebound into the closed suggests that the market is on guard for a potential breakout to the upside.
Along with the bullish 4.7 draw on crude oil inventories the API also showed the gasoline inventories rose by 2.4 million barrels which might have been slightly higher than some people expected. Distillate only increased by 700.000 barrels.
As always we will wait for the Energy Information Administration report that comes out today at 9:30a central time to confirm this data yet who are we kidding. At the end of the day probably the final piece in the potential run up in oil may be the Federal Reserve decision. Today the Fed will cut rates as expected and if the market doesn’t see them as coming off as too hawkish we probably will start to see some upward movement on the oil price. We think we have a real shot for the mid 70s over the next couple of weeks.
This comes as Iranian oil supplies seemed to be falling ahead of expected sanctions on Iran from the Trump administration and new sanctions from the current Biden administration. Despite Iran’s denials their well imports are falling. Tanker Trackers sees that Iran’s crude oil exports are at 1.2 million barrels per day during the first 15 days of December. The running average of the first 15 days during the three months prior was 1.7 million barrels per day.
There definitely is going to be a positive side to increasing demand for US LNG exports if they can ever get approved. S&P global is suggesting that US LNG exports will support 500,000 jobs a year and add $1.3 trillion to the US gross domestic product.
Getting on the short term there’s still some demand concerns. The latest coming from the Fitch rating agency. Fitch expects the global oil market to be in a surplus in 2025 as demand growth is going to fall below 1,000,000 barrels per day to be exceeded by supply growth of around 2,000,000 barrels a day. Of course, this is not what the Energy Information Administration expects so Fitch is kind of out on a limb here.
Natural gas prices here in the US are getting driven by weather forecasts. Prices are edging back up as the latest weather forecast shows that the US will be colder.
The Fox Weather Channel is reporting that the coldest air of season so far is to invade the US just days before Christmas. Fox Weather says that, “A potent winter storm, packing bone-chilling cold, is sweeping across the northern U.S. this week, bringing some of the season’s most frigid temperatures to the Northeast and mid-Atlantic. The FOX Forecast Center said temperatures would drop sharply on Saturday and Sunday, with highs expected to be nearly 20 degrees below average until early next week. So as those forecasts get colder natural gas goes higher. The key thing to watch other than weather is the gas production response.
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2週前
Natural Gas Eyes Upside Targets After Bullish Reversal Signal
By: Bruce Powers | December 17, 2024
• Natural gas shows a bullish reversal, targeting a breakout above $3.56, with higher levels at $3.85, $4.06, and $4.33 as momentum builds.
Natural gas is on track to complete a bullish reversal day on Tuesday that could lead to higher prices. Earlier in the session it dropped to a new pullback low of 3.09 before finding support and spiking higher to exceed yesterday’s high. It continues to trade strong, near the highs of the day, at the time of this writing. Today’s momentum burst could be a sign of additional strength to come.
Short-term ABCD Pattern Points to 4.33
Measured moves can be used from the nearby swings to identify an upside target from recent swings. On the chart it takes the form of an ABCD pattern. The pattern looks for price symmetry between the two advancing swings, AB and CD. Other larger patterns also identify other price target levels on the chart.
The pink ABCD pattern on the chart shows the closest swings. An initial target from this pattern is up at 4.33. That is a target well above the top of the recent symmetrical triangle at 3.64. It would align with the potential for a pickup in momentum following the triangle breakout.
Triangle Top at 3.64
Nonetheless, an initial upside breakout and bull trend continuation signal is triggered above the recent highs of 3.56. That would put natural gas well on its way to approaching the top of the triangle at 3.64. Certainly, bullish momentum has the potential to have natural gas bust right through that high and head towards higher targets. Higher targets, prior to reaching 4.33, would be around the 38.2% retracement at 3.85.
Potential Inside Week in Process
Although it continues to look like there is a good chance this week will end as an inside week, if it does it sets up for the potential of a weekly inside week breakout for next week. Further up from the 38.2% retracement is a extended target for a rising ABCD pattern (purple) at 4.06.
Also, let’s consider the 4.33 target along with other price levels. Looking at the chart can be seen that there is the confluence of several indicators starting from the 4.06 price level. The target price range goes to 4.39 and then 4.50, followed by 4.56. Resistance could be seen anywhere within that zone, if it is reached.
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2週前
Crude Oil Pullback Sets Stage for Potential Upside Continuation
By: Bruce Powers | December 17, 2024
• After a pullback to the 20-Day MA, crude oil shows bullish signals but must overcome resistance near $73.27 to confirm strength.
Crude oil triggered an initial breakout of consolidation last week, reaching an interim swing high of 71.41 before pulling back. Subsequently, Tuesday led to a deeper bearish pullback and a test of support around the 20-Day MA with the day’s low of 69.22. The drop to the 20-Day line took crude back below the downtrend line (purple) that marks the top of consolidation.
However, at the time of this writing it looks like there is a good chance today’s close will be above the line. That would indicate that it now represents support, which would be bullish. Nonetheless, further signs of strength are needed to continue to support that thesis.
Finds Support at 20-Day Line
Notice that today’s pullback to the 20-Day line was the first test of a previous resistance area since last week’s bullish breakout. The 20-Day line was reclaimed on the same day the consolidation breakout triggered. Since a new lower swing high has been generated as of today, that high at 69.98 can be watched as a potential pivot.
A little further up is a more significant upswing high at 71.79. If crude can get above and stay above that price level, higher prices become more likely. Previous resistance shows around the 70.19 to 73.27 highs, which corresponds to the 50% retracement at 72.97.
Consolidation Breakout Could Trigger Momentum Spike
However, since a breakout of consolidation triggered there is the potential for a more aggressive move higher given the compression of the price range over recent months. In that case the 61.8% Fibonacci retracement is at 74.42 followed the 78.6% retracement at 76.47.
Also, notice that the lower boundary line of a large symmetrical triangle pattern cuts through the area between the two price levels. It also represents potential resistance. It will be interesting to see how crude oil relates to the line given that it represents the triangle.
Downward Pressure Remains
Overall, crude remains in a downtrend. The more significant swing low of the price structure of the trend is at the swing high of 73.27 from early-October. If that price level is exceeded, then a bullish long-term reversal is indicated and an upside breakout through the triangle would have also been triggered. Regardless of current technical indications, patterns evolve or fail if they don’t follow through on the initial distinction.
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2週前
Cease Fire and The Fed. The Energy Report
By: Phil Flynn | December 17, 2024
Oil failed for the second time as it attempted to take out the 100-day moving average and has fallen back into a new tight trading range.
The reason for the failure seems to be the fact that Israel is talking about potential progress regarding a ceasefire in the Gaza Strip. At the same time, the market is also taking a pause ahead of the Federal Reserve decision on interest rates coming up on Wednesday.
Weak economic data in China also sort of weighed on sentiment. And we saw more reports that India’s demand seems to be picking up where China is leaving off. John Kemp Energy reports that DIA’s petroleum consumption increased by 3.5% in the first eleven months of 2024 compared with the same period in 2023. Bloomberg reports that Chinese leaders plan to set an annual growth goal of about 5% for next year and raise the budget deficit to 4% of gross domestic product.
The report comes days after top leaders including President Xi Jinping wrapped a yearly economic conference in Beijing, where they were expected to set goals for 2025. Specific targets will only be officially announced at a parliamentary huddle in March, if the leadership sticks to precedent. The growth rate is underwhelming for China from historical standards but at the same time, to achieve that rate consistently China is going to have to do a lot more on the stimulus front.
Reuters is reporting that a top Russian general accused by Ukraine of being responsible for the use of chemical weapons against Ukrainian troops was assassinated in Moscow by Ukraine’s SBU intelligence service in the most high-profile killing of its kind.
This comes a day after President Trump said that Ukrainian President Zelensky should take a deal from Russia to stop the war. So after it failed to breakout, crude oil looks technically vulnerable so we’re going to need to see some signs of stability for the market to launch into the higher 70s.
Petroleum inventories should show decent drawdowns across the board. I have them pegged as falling about 2,000,000 barrels in both crude oil gasoline and distillates.
And keep in mind the official start of dwindling volume going into the Christmas holiday week could start after the Fed meeting tomorrow. A lot of people will react to the Fed and start to pack up the sleigh and sled into the New Year. Of course, that doesn’t mean that the oil market won’t move. In fact when we get close to these major holidays there are tendencies to make some major move either to the upside or the downside. So, make sure you’re protected before you leave for the holiday.
Natural gas has been moving. We’re getting a little bit of a pop on natural gas today after yesterday’s sell off which really has been driven by weather and production. The larger issue of course has been the prolific nature of US natural gas production which has been keeping prices low. But for producers that have been struggling, there are some signs of hope.
Javier Blass at Bloomberg reports that, “the Permian region is enjoying the highest monthly gas price (Waha) in ~2 years. Month-to-date is ~$2.5 per MMMBtu, a level unheard of since Dec 2022. The reason is the opening of the Matterhorn gas pipeline. Higher gas prices typically mean higher oil output.
Oil Slick Fox Weather reported that, “A heavy storm Sunday damaged two Russian tankers carrying thousands of barrels of oil and caused an unknown amount to spill into the sea, according to reports from Reuters. Video taken from the command bridge of one of the ships shows part of one vessel sinking in the Kerch Strait, which is between Russia and the annexed territory of Crimea. According to Russian state media sources cited by Reuters, the two tankers were carrying some 62,000 barrels of oil. Russian officials said they are still trying to determine exactly how much oil has spilled. Reuters reported that Russia’s emergency ministry said one crew member was killed and 25 others were rescued. Kremlin officials said the government is working to mitigate the impact of the spill, according to state news agencies cited by Reuters.
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2週前
Natural Gas Retains Near-term Trend in Deeper Pullback
By: Bruce Powers | December 16, 2024
• Recent price action hints at a consolidation week for natural gas as resistance around 3.56 and support near the 20-Day MA remain in focus.
Natural gas dropped to a pullback low of 3.145 on Monday before support was seen. The decline continued last Friday’s bearish reversal and established a retest of support around the 20-Day MA (purple). Watch for where natural gas closes the session relative to the 20-Day MA.
Recent tests of the 20-Day line led to trading below the line intraday before recovering to end the daily sessions back above the 20-Day MA. Similar behavior occurred today. Therefore, a daily close above the 20-Day MA would be consistent with recent price behavior that reflects a bullish trend. Otherwise, a daily close below the 20-Day line could be an early indication of slightly diminishing demand.
Weakness Persists
Also, potential support around the near-term uptrend line was breached today. This was another minor item, but it could be an early clue to falling demand that would require further evidence. Recognize that a failed breakout to new highs was established with last week’s high of 3.56. Clearly there is resistance around that price level as it also led to a bearish reversal from the first high on November 22.
Therefore, if natural gas is going to have a possibility of breaking out above the 3.56 highs prior to a sustained decline below the 20-Day MA, demand needs to be strong enough to do it. If demand is not strong enough to facilitate a new high breakout, then consolidation near the highs is possible or another decline to below the 20-Day MA. This is why small clues related to supply and demand could help to better prepare for the next moves.
Consolidation Looks Possible
It looks like there is a chance that this week may be largely consolidation type price action given the weekly pattern. Last week’s price range was from 3.07 to 3.56. The week triggered a bearish reversal as natural gas exceeded the previous week’s high of 3.28. However, the close could have been stronger as it was 3.27, below the prior week’s high. For the week the price range was relatively large. Therefore, we could see an inside week this week, in preparation for another attempt at new highs. A scenario to consider.
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2週前
Crude Oil Strong but Near Top of Range
By: Christopher Lewis | December 16, 2024
• The crude oil market continues to see a lot of noisy behavior, as we continue to see a lot of noisy behavior. The oil market is one that I believe will be stronger next year, but this time of year makes it likely that we will just hang about.
WTI Crude Oil Technical Analysis
The West Texas Intermediate crude oil market has shown itself to be somewhat sideways during the early hours on Monday as we are hanging around at the top of the overall consolidation range. All things being equal, this is a market that I think continues to look at the $72.50 level above as a potential barrier. If we can break above that level, then we will take on the 200-day EMA next. All of this being said, I do believe that crude oil will rally early next year.
However, I don’t necessarily think that you throw a ton of money into the market right now. Short-term dips could be bought into, I suppose. If you are a short-term trader, the relative strength index is neutral, but the stochastic oscillator is a little overbought. So, a lot of this is going to come down to, are we range-bound or are we not? I suspect we’re probably still range-bound for a little bit. So, buying on the dips will be how I play this.
Brent Crude Oil Technical Analysis
Brent market’s very much the same. It’s a little bit more compressed. You can see here’s an example of the RSI. On the chart, it is very much in the middle of the range. But really at this point, you have to assume that we are still range bound and we are getting to the overbought area. As we head to the end of the year, it does make a certain amount of sense that maybe, just maybe, we are going to kill some time before traders come back to work in January, so I’m erring on the side of caution and thinking sideways, but I’m more focused on the upside.
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2週前
China Slowing Oil Down. The Energy Report
By: Phil Flynn | December 16, 2024
The oil price rally has been slowed by slowing Chinese economic data even as the market is seeing record global demand and the growing risk of new sanctions on Russia and Iran and a force majeure on oil in Libya. This comes as Russian President Putin is suggesting the West is crossing some red lines.
Reuters is reporting that, “Russian President Vladimir Putin on Monday accused the West of pushing Russia to its “red lines” – situations it has publicly made clear it will not tolerate – and said Moscow had been forced to respond. Putin told a meeting of defense officials that Russia was watching the U.S. development and potential deployment of short and medium-range missiles with concern. He said Russia would lift all of its own voluntary restrictions on the deployment of its own missiles if the U.S. went ahead and deployed such missiles according to Reuters.
Oil dropped after China’s National Bureau of Statistics reported that retail sales growth in China came in weaker than unexpected in November, rising 3% a year, a sharp drop from October’s 4.8% gain. We did see an ok reading on industrial production, which was up 5.4% in November.
The news slowed down the oils’ progress after Friday closing above the 20-day and 50-day moving average and closing just short of the 100-day moving average which comes today at 7140. So, the market will start focusing very carefully on what type of stimulus package that China is going to offer to the market. The sense is that if China does not come out with a major stimulus package the market might falter.
Bloomberg reported that China will cut interest rates and the reserve requirement ratio in a timely manner next year, the 21st Century Business Herald reported, citing Wang Xin, director of the research bureau under the People’s Bank of China.
Still there is a global oil supply deficit, at least if you believe the data provided by the International Energy Agency and if you look at falling global oil inventories.
Also, more sanctions on oil could further restrict supply. Reuters reports that the European Union has adopted a 15th package of sanctions against Russia over its invasion of Ukraine, including tougher measures against Chinese entities and more vessels from Moscow’s so-called shadow fleet, the EU Commission said in a statement on Monday. The new sanctions package adds 52 vessels from the shadow fleet that try to circumvent Western restrictions to move oil, arms and grains. It brings the total listed to 79.
This comes after the United States has imposed sanctions on 35 entities and vessels that have transported Iranian oil. The Iranian regime uses oil revenues to fund its nuclear program, missile and UAV development, support for terrorist proxies and partners, and to perpetuate conflict throughout the Middle East.
BNE reports that, “Iran’s oil exports to China have dropped to a record low in two years, a senior analyst at consultancy HedgePoint said on December 15, indicating that recent US sanctions to crack down on Iranian crude were delivering. Kim Benni, the head of trading at HedgePoint Global Markets, shared a chart on his X account showing that Iranian oil exports to China fell below 600,000 barrels per day (bpd) in November, noting that Iranian net sales “are starting to fade.”
This is the lowest volume since December 2022, according to the chart. In contrast, the chart shows that Iran’s exports to China, which typically account for more than 90% of Iranian seaborne sales, were around 1.8mn bpd in September and 1.3mn bpd in October.
Kemp Energy reported that China’s crude oil imports totaled 505 million tonnes in the first eleven months of the year down from 516 million tonnes in the same period in 2023 as widespread deployment of electric cars and gas-powered trucks has cut domestic gasoline and diesel consumption.
Libya’s NOC declared a force majeure on oil exports. Reuters reported, “Fires that broke out in a number of reservoirs in Libya’s Zawiya refinery have been brought under control, Khaled Abulgasem Gulam, spokesperson for the country’s National Oil Corporation (NOC), said in a statement on Sunday. Zawiya, 40 km (25 miles) west of the capital Tripoli, is home to Libya’s biggest functioning refinery, with a capacity of 120,000 barrels per day. The refinery is connected to the country’s 300,000 bpd Sharara oilfield.
Despite the concerns about Chinese demand, we think oil is poised to recover here in the next couple of days. Keep an eye on the 100-day moving average a close above that area could catapult the market back up to the high 70s very quickly.
Natural gas is pulling back along with the temperatures. The markets seem to be focused on the short term warm up and disagreements about the weather outlook for January is keeping the market under pressure. This morning there’s also signs that natural gas producers have responded to stronger than expected demand by raising production. That could ease inventory draws if that continues.
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2週前
WTI Crude Oil CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | December 14, 2024
• Following futures positions of non-commercials are as of December 10, 2024.
WTI crude oil: Currently net long 181.4k, down 7.4k.
Once again, oil bulls managed to defend crucial support at $66-$67. For more than three months now, this price point has routinely attracted buying interest, although subsequent rallies for the most part have not amounted to much.
Last Friday, West Texas Intermediate crude closed at $67.20. This Monday, it ticked $67.08 intraday, and bids showed up. The week closed up 6.1 percent to $71.29/barrel.
This week’s gains have pushed the crude into a months-long range between $71-$72 and $81-$82. The 50-day moving average at $70.23 was reclaimed Friday. More gains are possible ahead. In the best of circumstances for the bulls, trendline resistance from September last year lies at $78.
In the meantime, US crude production in the week to December 6 increased 118,000 barrels per day to 13.631 million b/d – a record. Crude imports decreased 1.3 mb/d to six mb/d. As did crude inventory which declined 1.4 million barrels to 422 million barrels. Stocks of gasoline and distillates, on the other hand, went the other way – respectively up 5.1 million barrels and 3.2 million barrels to 219.7 million barrels and 121.3 million barrels. Refinery utilization fell nine-tenths of a percentage point to 92.4 percent.
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