Energy Prospectus

This chart looks at Crude Oil on a monthly basis over the past decade. https://www.investing.com/analysis/crud ... -200316287

We applied Fibonacci retracement levels to the highs in 2011 and the lows in 2016 at each.

The rally of late has Crude attempting to break out above the 50% retracement level (which is the halfway point) of the 2011 highs and the 2016 lows at.

There is resistance at $72 and $75, but if WTI Crude succeeds to break above the halfway point, the next Fibonacci retracement level comes into play at the $80 level, which is over 10% above current prices.
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Raymond James forecast is that WTI will average $75/bbl in Q4 and that forecast was made before Trump pulled the U.S. out of the Iranian Nuke Deal.
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Investing.com - Crude oil prices may hit $100 a barrel again, but it's not likely to happen until next year.
That's the forecast of Bank of America Merrill Lynch (NYSE:BAC).
In a note to clients, the firm said the collapse of Venezuela's oil industry and potential supply disruptions in Iran could push Brent North Sea crude past their $90 target price for mid-2019 up to $100 for the first time since 2014.
President Trump's recent decision to renew economic sanctions on Iran could ultimately cut supply from OPEC's third largest producer by as much as 1 million barrels a day. Venezuela's production has fallen by a third in the past two years and BAML expects it to decline by another 500,000 barrels a day in the next 20 months.
Crude oil prices are already up 15% this year, with Brent near $80 a barrel.
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Brent Oil Blowout by Phil Flynn (May 15, 2018 09:05AM ET)

Looking for fear in the oil market? Look no further than the Brent versus West Texas Intermediate oil spread that blew out to the highest level all year and the highest since 2015, with Brent holding a $7.30 premium currently above WTI. European and Asian buyers of Brent are pricing in the risks and realties of the fallout from sanctions on Iran to increased tensions in the Gaza strip as well as the inability of traditional Brent oil producers to fill that void.

Libya and Nigeria have failed to prove to be reliable producers and now it is being reported by Reuters that ConocoPhillips is looking to sell its North Sea assets to focus on shale in the U.S., leaving some to speculate that the North Sea production will see accelerated declines after a few years of stability. It shows that Oil companies are focused still on lower costs projects with much quicker returns and are failing to make the big investments it will take to try to reverse or stabilize fields in the North Sea.

So now more than ever Europe is looking to the U.S. shale patch to fill the void. The spread between the two contracts is basically Europe and Asia screaming for more oil from the United States to fill the potential void and feed their ravenous oil demand. For WTI, while it is under performing at this point, it is not by any means bearish for the U.S. benchmark. The strong global demand for WTI will keep us supported, and even if some of the global risks get reduced WTI will benefit from the unwinding of the Brent versus WTI spread that is reflecting most of the geo-political risks.

We also have weather risk on crude. Already we have a tropical disturbance in the Gulf of Mexico. The National Weather Service says that a deep-layer non-tropical area of low pressure located over the eastern Gulf of Mexico continues to produce widespread cloudiness, showers, and thunderstorms across much of Florida and southeastern Georgia.

Although this system could still acquire some subtropical or tropical characteristics while it moves slowly northward across the eastern Gulf of Mexico during the next few days, the low pressure system has not shown signs of increased organization during the past 24 hours. Regardless of subtropical or tropical cyclone formation, this system will produce locally heavy rainfall and possible flash flooding across portions of Florida and the southeastern United States during the next few days. Formation chance through 48 hours...low...20 percent. Formation chance through 5 days...low...30 percent.

Crumbling Venezuelan output tightens oil market.
As Venezuela’s oil production and exports continue to fall off a cliff, the case for higher oil prices is strong. A decline in Iranian oil exports, which will occur alongside plunging output from Venezuela, would create the “perfect cocktail” for oil to hit $100 per barrel this year or next, according to PVM. At that point, OPEC would be under a great deal of pressure to lift the production limits. ConocoPhillips’ (NYSE: COP) seizure of PDVSA assets in the Caribbean threatens to accelerate production declines in Venezuela.

Tuesday May 15, 2018

Brent topped $79 per barrel in early trading on Tuesday, closing in on the psychological threshold of $80 per barrel. However, benchmark prices posted modest losses by mid-morning. The oil market continues to tighten with OPEC keeping barrels off of the market and reducing inventories down to the five-year average. The near-term tension between bulls and bears will continue to be dominated by geopolitical risk, with fears of outages in Iran pushing prices up.

$100 oil not as painful as it used to be. Oil prices at $100 per barrel would reduce U.S. GDP by 0.4 percent in 2020 compared to if oil was priced at $75 per barrel, according to Bloomberg. But that economic hit is not as strong as it used to be because the U.S. economy has become less energy intensive and the U.S. also exports more oil than ever before. “$100 oil won’t feel like it did in 2011,” and could end up feeling “more like $79” per barrel, economists Jamie Murray, Ziad Daoud, Carl Riccadonna and Tom Orlik concluded. “With the U.S. still firing on close to all cylinders, the rest of the world would suffer less as well – global output would be down by 0.2 percent in 2020.”

EU seeks to rescue Iran nuclear deal. Germany, France and the UK are trying to rescue the Iran nuclear deal in order to shield EU companies from U.S. sanctions while also heading off another war in the Middle East. Foreign ministers from the European nations will meet with their Iranian counterpart on Tuesday. “There is no plan B,” French Foreign Minister Jean-Yves Le Drian told Le Parisien newspaper in an interview. “Plan B is war.”