Oil prices rallied nicely in yesterday’s trade but once again had trouble getting above the 50-day moving averages in WTI and Brent. Today’s trade could witness a similar disposition, as the general reaction by risk markets yesterday to “bullish” news from the Fed was to finish either lower on the day (as equities did) or significantly below the day’s highs (as energies and precious metals did).
The market appears as though it will trade to the downside in the near-term thanks to Monday’s break of key channel support and due to the inability to maintain rallies. Pressure may also come from a lack of progress in fiscal cliff talks, the potential that OPEC leaves production unchanged at today’s meeting, building levels of U.S. gasoline stocks, and high levels of U.S. oil production.
A clarion is a medieval trumpet that had clear, shrill tones. Trumpets were often uses to get people’s attention when making announcements. We are using “clarion” in the context of making announcements, as well as being thought-provoking when sharing our information and opinions with those who are interested in new investment ideas. Topic: Country Indexes The first chart, below, shows the weekly closes of the major bourses since
Energy Price Outlook Oil prices may trade lower in the near-term, as Monday’s action failed to respond to moderately favorable developments. There was support for yesterday’s trade given by the bottom of a rising channel pattern at $86.20 and from a recovery in economic data from China and Germany. However, an uninspiring trade in the stock market and a lack of progress in fiscal cliff talks added on to other
U.S. markets are coming off a meager up week with the Dow Jones and S&P 500 closes the in the green the last 3 session prior to the weekend. The NASDAQ, however, is having difficulties with its largest component Apple (AAPL, quote) continues to struggle.
This week’s trade in energies could see a mixed trend overall, but selling rallies may still be the most attractive trade at the moment. WTI will find key resistance at the 50-day moving average at $88.20 while strong support will be at the bottom of a bullish flag pattern at $86.20. A busy week is in store, as the weekend’s Chinese economic and trade data will be digested on Monday.
Natural Gas traded lower settling $3.666, down $0.034 (0.9%). The curve was weaker, 13/16 down $0.03. Hub cash was weaker, ~$0.20 back this morning, Z-6 down $0.40 to $3.90 as temps are running 10-15 above normal in major Northeast/Midwestern cities through Monday.
The oil market is a tough call today and could potentially rebound amid channel line support and today’s non-farm payroll report. The channel offers support at $86.10/bbl in WTI, while we think that the payroll report could be spun favorably even if it misses estimates due to superstorm Sandy.
Following the market opening Thursday, the Dow traded up 0.03 percent to 13,038.87 while the NASDAQ rose 0.37 percent to 2,984.75. The S&P also rose, increasing 0.09 percent to 1,410.48.
Oil prices may fall slightly in the near-term, as pressure is offered by technical factors and the lack of progress in fiscal cliff negotiations. Background pressure will come from next week’s OPEC meeting where quotas are expected to be left unchanged, and from the growing amount of U.S. oil production.
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