The price of oil is usually measured on a per-barrel basis. The price also can be quoted as the spot price, which is the price of buying a barrel at the current moment, or as the futures price, which is the cost of buying a barrel of oil in future months. Two main contracts traded are West Texas Intermediate (WTI) and Brent Crude. WTI oil is light sweet oil that’s very well-suited for gasoline. Brent Crude is a blend of oil from the North Sea. Futures prices are quoted in increments of 1,000 barrels of oil for every one contract.
Uncertainty appears to be influencing oil prices near-term, and the long-term outlook doesn’t look to be showing much strength. For the time being, oil prices are stuck in a trader’s market.
Current and Near-Term Action in Oil PricesOil prices are currently at a crossroads with the longs and shorts battling it out. On one hand, there appears to be some decent support at the $40.00 level for the West Texas Intermediate (WTI), as prices for the May futures contract has been bid up to the $52.00 level. Conversely, I expect to see some resistance selling, as oil prices edge higher due to the record oil storage and the fact that the global demand side continues to be a major overhang. China is importing less oil ... Read More
Oil prices are on the downside, and we could see West Texas Intermediate (WTI) oil decline to the $40.00 level and below. A few years ago, the mere mention of oil in the $30.00 level would have been viewed as silly, as many believed $100.00-a-barrel oil prices would be the norm. But here's the problem: the advanced fracking technique to squeeze out oil from the cracks in the rock led to a revolution in oil production, which inevitably is hurting oil prices. The good news: it’s creating an investment opportunity for aggressive investors.
Pressures Pushing Oil Prices DownwardNow, we have massive domestic oil production from the shale oil in Montana and North Dakota that has helped to produce a flood of oil i ... Read More
The energy sector was dismal in 2014 and it is looking like we could see more of the same for this year. If you are long on oil, you may want to read this, as oil prices could move lower and there are two strategies you can consider to profit from their drop: put options and futures. Currently, we have the excessive supply overriding the declining demand as the global economy struggles along. China just announced its gross domestic product (GDP) growth would fall to seven percent this year; however, I think the real figure is likely already below seven percent, as there’s some fudging of the numbers. The eurozone could dwindle into another rec ... Read More
We are three days away from Christmas and just over a week from the New Year. This is the perfect time to look over your portfolio and holdings in the stock market. To get set for trading in the stock market in 2015, take some winners if you haven’t already done so and dump some losers. Then consider what is occurring in the stock market and global economy (especially oil and Russian stocks) in relation to your economic outlook for the New Year. Stocks were trading weak last Tuesday, with both the S&P 500 and DOW below their respective 50-day moving averages (MAs). We got an early Christmas present after the stock market surged on We ... Read More
Oil prices are in a dark area now, as the commodity is considered the dirtiest of all commodities at this time. With no strong base in sight for oil prices, we could see additional downside moves; albeit, $50.00 looks like a pretty good area for support. On the chart of the West Texas Intermediate (WTI) crude, oil prices fell to the $53.00 level earlier this week but managed to stage a small rally back to $55.00–$56.00.