Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20
U.S. Long Bond: Let's Review the "Upward Point of Exhaustion" - 27th Jun 20
Gold, Copper and Silver are Must-own Metals - 27th Jun 20
Why People Have Always Held Gold - 27th Jun 20
Crude Oil Price Meets Key Resistance - 27th Jun 20
INTEL x86 Chip Giant Stock Targets Artificial Intelligence and Quantum Computing for 2020's Growth - 25th Jun 20
Gold’s Long-term Turning Point is Here - 25th Jun 20
Hainan’s ASEAN Future and Dark Clouds Over Hong Kong - 25th Jun 20
Silver Price Trend Analysis - 24th Jun 20
A Stealth Stocks Double Dip or Bear Market Has Started - 24th Jun 20
Trillion-dollar US infrastructure plan will draw in plenty of metal - 24th Jun 20
WARNING: The U.S. Banking System ISN’T as Strong as Advertised - 24th Jun 20
All That Glitters When the World Jitters is Probably Gold - 24th Jun 20
Making Sense of Crude Oil Price Narrow Trading Range - 23rd Jun 20
Elon Musk Mocks Nikola Motors as “Dumb.” Is He Right? - 23rd Jun 20
MICROSOFT Transforming from PC Software to Cloud Services AI, Deep Learning Giant - 23rd Jun 20
Stock Market Decline Resumes - 22nd Jun 20
Excellent Silver Seasonal Buying Opportunity Lies Directly Ahead - 22nd Jun 20
Where is the US Dollar trend headed ? - 22nd Jun 20
Most Shoppers have Stopped Following Supermarket Arrows, is Coughing the New Racism? - 22nd Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Crude Oil Forecast Summer 2009

Commodities / Crude Oil Jul 08, 2009 - 12:59 AM GMT

By: Nadeem_Walayat

Commodities

Best Financial Markets Analysis ArticleThis is a quick update to the analysis of December 2008 that projected an uptrend in the Crude Oil price into mid 2009 targeting $75, to be followed by a downtrend back below $50 towards $40 as illustrated by the original graph.


Crude Oil Summer Trend

Quick Technical Analysis - Crude oil hit its summer objective in June by peaking just shy of $74, following which it made a lower high at 73, and confirmed the downtrend on break below 66. The current action is expected to correct the bull run from $35 in December 2008, with the key consolidation zone of $47.5 to $55 which crude oil is homing in on to again form a base for the resumption of the rally into 2010. Therefore we have a price target zone of $47.50 to $55, the question now is how long will the downtrend last ? The downtrend appears to be projecting for a trend lower into late August / Early September, thereafter some sideways action could be in order before the rally gains traction later in the year.

Crude Oil Conclusion - Downtrend targeting $45 to $50 by start of September 2009, thereafter base building before the next leg higher.

The in depth update for crude oil will follow later, to ensure you receive this in your email box subscribe to my always free newsletter.

Crude Oil Mega-Trend - The long-term mega-trend is for much higher crude oil prices, we will probably see see the $200 oil price that Goldman Sachs were calling and distributing into as crude oil approached $150 last June. However as I pointed out in the analysis of December 2008 and iterated several times during the year that where oil is concerned 2009 will be the year for accumulating long-term investment position.

Therefore the trend to $45 gives long-term investors ANOTHER opportunity to accumulate into a mega-trend. Favoured routes are the oil ETF's , oil producers and explorers again spread your risk by using ETF's and investment trusts, and off course theirs Russia, a crashed stock market that has so far failed to recover despite the recent rebound in the oil price, again this would need to be a long-term exposure.

Leveraged ETF's Warning

I was going to write at depth as to why investors should steer well away from leveraged ETF's such as that for crude oil, where even if your RIGHT and the price of oil doubles as it did, you could STILL LOSE MONEY!, Leveraged ETF's should be avoided by all but ultra-short-term traders and I am talking about 1 to 3 days, any more and your trading the wrong vehicle, instead I see infuriating commentary on the internet targeting investors towards leveraged ETF's ! In my opinion THEY ARE A SCAM INVESTMENT DESIGNED TO PART YOU WITH YOUR MONEY. Short-term trading vehicle?, maybe, but Investment vehicle - NO!. Ron Rowland explained earlier in detail how they work - Understanding The Dangers of Leveraged ETF's.

Inflation / Deflation

The higher crude oil rose during the first half of 2009, the greater were the expectations for much higher inflation, in fact at the peak these tipped into many calls for hyperinflation. Now as crude oil has begun is downtrend the deflation argument has again come to the fore as the more dominant outlook.

My own analysis in the forecast for UK inflation for 2009 as of Dec 08, forecast that UK inflation as measured by the RPI index would fall to -1.2% by mid 2009 and thereafter see a return to mild inflation by year end to target +0.8%. UK inflation hit -1.2% in April and recorded a -1.1% rate for May, which is inline with the forecast and therefore we should continue to see a gradual trend out of deflation and towards a weak +0.8% RPI inflation rate by year end.

Therefore my conclusion remains that after deflation ends in the coming months, inflation looks set to remain weak into the end of 2009 and most likely for the first half of 2010 at least. I will elaborate up on the inflation outlook and forecast for 2010 later this year.

So I do not see forward signs of either deep deflation or hyperinflation, but rather weak inflation for the next 6 to 12 months.

Economy

The falling oil price acts as a stimulus to economy so should 'eventually' be positive for the stock market, the pattern of trend of which is expected to be inline with my outlook for the stock market.

By Nadeem Walayat
http://www.marketoracle.co.uk

Copyright © 2005-09 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 250 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Jas Singh
31 Jul 09, 15:30
Downside Target

Hi Nadeem

Do you still target a downside of $47.5 - $55 sometime in August/early September?

I pay particular respect to your target levels, you are consistently accurate.


David
13 Aug 09, 03:05
Oil at 70...

With oil at $70, do you still think it'll even be possible to go back to 50 by the end of the month.

I know you're quite a good economist, but I believe that this target is wrong.

I wonder if you're going to write an article to adjust the target ?

Kind Regards,

David.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules