Energy Prospectus

Based on my basic reading of the charts it appears oil has little resistance until it gets to $95/bbl. It closed over $89/bbl today. However, the NYMEX futures contracts are very flat, indicating to me that the traders don't expect oil to keep moving higher.
Other opinions are encouraged.

i don't see any major resistance. a little at 90 and that is over two years old, so not significant. of course the market fundamentals may come into play before any technicals in a situation like this. nymex futures (which imo are very short term) may be indicating these fundamentals. after all we've had quite a run. time will tell all.

jim

I’m a little slow getting to this but it is significant news.
http://www.csmonitor.com/World/Global-I ... is-averted

This report means two things:
1. The age of Cheap Oil is over forever
2. The U.S. will be moving toward natural gas as the primary source of energy (BTW this was predicted by U of H professor Michael Economides about ten years ago in his book “The Colors of Oil”.)


The report was made public on November 9 and oil prices started moving higher a week later.

The Good Lord has blessed North America with abundant supplies of coal and natural gas so we will be fine. The number one issue is transportation fuels. They could get very expensive with any disruption in our oil supply from the Middle East.

Oil prices had been relatively stable for more than a year. They've moved higher since the Federal Reserve announced plans to inject $600 billion into the economy. Prices crossed the $90 mark early Tuesday as President Obama and Republican leaders hammered out an agreement to extend Bush-era tax cuts. A cold snap also swept through Europe and the U.S., lifting demand for fuel.

Wall Street analysts now predict that oil will hit $100 per barrel sometime next year. They point to rising demand from China and other emerging economies. OPEC countries can crank up production to meet that demand now, but their ability to do that is expected to decline over the next few years.

Morgan Stanley estimates that spare production capacity will be cut in half in two years, falling to levels seen in 2007 and 2008, once again raising tensions about supplies and the world's thirst for oil.

Already, the International Energy Agency notes that supertankers are storing less oil offshore, and experts predict supplies will tighten elsewhere.

Oil prices above $90 -- the top of the range considered "comfortable" by the world's main oil exporters -- could crimp demand and stifle economic growth.

"This could fuel speculation that OPEC will decide on measures to dampen prices at its extraordinary meeting at the weekend, which could take the wind out of the sails of the oil price rally for a while," said a report from Commerzbank in Frankfurt.