Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
S&P SEASONAL ANALYSIS - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Crude Oil Price Bear Market Bottom? As WTIC Pops Back Over $30

Commodities / Crude Oil Jan 22, 2016 - 07:38 AM GMT

By: Nadeem_Walayat

Commodities

The crude oil price hit a new low on Wednesday of just under $27, prompting many doom merchants to emerge to proclaim / reaffirm that $20 and even $10 is on the horizon. However, on following day the oil price rallied strongly to just shy of $30 to end Thursday at $29.85 and this morning has popped just above $30 to currently stand at $30.20. With the key question being asked is are we witnessing the early stages of an oil price bottom (WTIC) or is this just a few days of calm before the next oil price crash storm?


The oil price collapse has sparked panic amongst producers, with many now resigning themselves towards annihilation. For instance the head of BP, Bob Dudley warned that the oil price could fall as low as $10 before recovering, which matches calls by several others such as Standard Charted. A sustained drop to $10 per barrel would put several oil majors at risk never mind the smaller U.S. oil frackers that are already in the process of going bankrupt and could see half the industry disappear by the end of 2016 as most business models were based on oil prices of above $60.

My recent in-depth analysis concluded in a detailed trend forecast for the crude oil price as covered in this comprehensive 38minute video:

My forecast conclusions were for the oil price bear market to have made it's final bottom BY early February 2016 and embark on a bull market that would target a a trend towards a late year high of $60 as excerpted below :

17 Jan 2016 - Crude Oil Price Crash Triggering Global Instability, Trend Forecast 2016

Crude Oil Price 2016 Forecast Conclusion

My forecast conclusion is for the crude oil price to trade within three distinct trading ranges for 2016 of $20 to $40, $35 to $50 and $62 to $40. Furthermore the trend pattern imposed onto the trading ranges implies that a bottom is likely by early February 2016 at around $25, followed by a trend higher into Mid year towards $50, a correction into September, followed by a trend towards $62 before succumbing to a correction during December to target an end year price of approx $48 as illustrated by the following forecast graph.

The bottom line is that the current the oil price collapse is a wake up call to all major oil producers that crude oil as an energy source is running out of time. So whilst there may be future oil price spikes, however the long-term trend, given the likes of climate change is for the oil age to go the way of previous ages such as the Stone Age and Bronze age and so it will be for the oil age. Which means nations such as Saudi Arabia, regardless of price understand they need to get as much of their oil out of the ground as possible and sold off before they run out of customers!

Therefore current price action is inline with expectations of an oil price now trying to carve out a final bottom in the region of $25 to 27 for which it has about another 2 weeks to complete, so expect several retests of the low before the market enters into a sustained uptrend and remember not to expect a raging bull market any time soon, not with at least 500,000 b/d of Iranian oil about to start hit the market over the next few weeks.

See the original article for my view on oil stocks, i.e. whether now is a good time or not to invest. And ensure you are subscribed to my always free newsletter (only requirement is an email address) for future updates and the following forthcoming pieces of in-depth analysis

  • Interest Rates 2016
  • US Dollar Trend Forecast
  • Stock Market Trend Forecast 2016
  • US House Prices Forecast 2016 and Beyond
  • Gold and Silver Price Forecast 2016

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2016 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 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 focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 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

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

despe906
24 Jan 16, 22:10
brent crude oil

Since the bear begun with the break out of a range contraction (triangle) around $105, we had only once such momentum off the lows : last year, first sessions of February which was the start of a long correction. The price resumed its descent last December. Few weeks on, we have momentum off the lows again. Of course, the market became choppier and the angle of descent is less steep, therefore such green candles may be the part of this market, but I think the propabilities favor a new correction. Anyway, the serious bears who were selling since $105 should have taken profits, counted the money and probably have long forgotten about oil...

If this is a bear market engineered in order to tackle Russia, fresh lows may follow at some point.

(Disclaimer : I don't trade oil)


Post Comment

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