[olekriri]

$127.79

[chuck6877]

$this->bbcode_second_pass_quote('idomar', 'I')'m not a chartist, neither do i pretend to know what a lot of 'technical' analysis means, however I have a question for you, excuse the preamble:

I can understand how charting and technical analysis may be useful for stocks relating to corporations on the various stock exchanges, these corporations do not report on a weekly basis the the performance of their companies and of their suppliers from all over the world.

People can choose to shop at different stores, buy from different suppliers and sell in different markets. Rumour may push up the value of a stock into 'overbought' or 'oversold' and towards or away from various moving average bands.

Now for the question(s):

Does the oil market really behave in the same way?

Can tecnical analysis on the oil market really be trusted when there are so many external factors that could affect it.

i.e Analyst 1 says that 'Oil is overbought at the moment and we are expecting a pull back'

meteorologist 1 says there is a hurricane forming in the GOM

Newscaster 1 says there is another bombing in Nigeria

Politician 1 says, we are happy with the price of oil

OPEC says the market is currently well supplied

HELP!!

[jeffvail]

My concerns with the application of standard technical indicators to the present oil market: show me a previous market in any commodity where supply is declining amidst highly inelastic demand and no viable substitute. I can't think of one off the top of my head, but assuming one exists, technical indicators should be weeded out if they didn't perform in that market. Assuming, of course, that technical trading has any merits based in actual causality, not just trader psychology. My hunch is that technical trading is valid, but only because it is a self-fulfilling prophecy whereby traders move the market because they act in the belief that there is "resistance" at a certain point, etc.

[darren]

$this->bbcode_second_pass_quote('idomar', '
')
Does the oil market really behave in the same way?

Can tecnical analysis on the oil market really be trusted when there are so many external factors that could affect it.

[Revi]

The price seems to be holding. Goldman Sachs says that the price will be averaging $148 a barrel:

http://www.bloomberg.com/apps/news?pid= ... fer=energy

They say that the price isn't going down because the front month contracts are so strong that they won't let it sag.

It's getting interesting.

[Eli]

Well there are times when things go parabolic. Instead of nice channel pointing to a general rise in price over time, you have a chart that accelerates and the price starts rising faster in a shorter amount of time.


Oil has the potential to do that, will it? Is anyones guess.

[Revi]

I think that the price may dip a bit this next few weeks, but if Goldman-Sachs are right we may see it go up again soon:

http://www.bloomberg.com/apps/news?pid= ... fer=energy

They think that there will be an average of $141 in the second half of the year.

[chuck6877]

$this->bbcode_second_pass_quote('jeffvail', 'M')y hunch is that technical trading is valid, but only because it is a self-fulfilling prophecy whereby traders move the market because they act in the belief that there is "resistance" at a certain point, etc.

[ohcomeon]

$this->bbcode_second_pass_quote('Revi', 'T')he price seems to be holding. Goldman Sachs says that the price will be averaging $148 a barrel:

http://www.bloomberg.com/apps/news?pid= ... fer=energy

They say that the price isn't going down because the front month contracts are so strong that they won't let it sag.

It's getting interesting.

[UncoveringTruths]

$this->bbcode_second_pass_quote('', 'P')resident Bush was in the oil-rich country Friday to appeal to King Abdullah for greater production to help halt rising gas prices in the United States.

But his national security adviser, Stephen Hadley, says Saudi officials stuck to their position that they already are meeting demand.

Hadley told reporters, "What they're saying to us is ... Saudi Arabia does not have customers that are making requests for oil that they are not able to satisfy."

[Revi]

Not only are we whining, but we're throwing temper tantrums as well:

Also, as Bush prepared to leave Washington, Senate Democrats introduced a resolution that would block $1.4 billion in arms sales to Saudi Arabia unless Riyadh agrees to increase its oil production by 1 million barrels per day. The Democrats said they introduced the measure to coincide with Bush's trip to send a message to Saudi Arabia that it should pump more oil to reduce the cost of gas for Americans.

From the article above. That will teach them. Teach them to buy arms from somebody else.

[dohboi]

I'm enough of a nerd to love chuck's graphs, but I think jeffvail hit it on the head when he said:

"My concerns with the application of standard technical indicators to the present oil market: show me a previous market in any commodity where supply is declining amidst highly inelastic demand and no viable substitute. I can't think of one off the top of my head, but assuming one exists, technical indicators should be weeded out if they didn't perform in that market."

We're wading into new territory here, and most technical analysis will be useful only in ever shorter bits of time. When complex systems start to break down, patterns start emerging and dissolving rather quickly.

Note, though that chuck's graph is logarithmic --the straight lines are actually exponential curves: in two year intervals since '02 oil has hit (or nearly hit) the following prices: 20, 40, 80...

I had long predicted, based on these figures to the scorn and derision of many even on these threads, that oil would hit 160 this year.

But the recent trends suggest that we may have already gone past exponential into hyperbolic price increase. This puts it beyond my modest mathematical capacities to calculate what we are looking at in the next few years, but it ain't pretty.

This is all not to say we couldn't see some wild swings along the way. I'd say they are quite likely, but timing them and especially putting money down on such timing is like trying to catch a falling knife.

[frankthetank]

A) Senators are really stupid
B) Senators are trying to look like they are doing something so they don't get voted out of office.

I'm sure the first one has a few members, but most will say about anything to get a vote (or a handjob).

[Novus]

If senators are too dumb to understand peak oil then we need peak oil candidates. America needs to start rationing right now and we need higher gas taxes to keep some of the oil money in the country.

[joeltrout]

$this->bbcode_second_pass_quote('Novus', ' ')America needs to start rationing right now and we need higher gas taxes to keep some of the oil money in the country.

[Smudger]

agree with dohboi. technical analaysis has been shown to work within a specific time period that could be one minute, ten minute sveral hours depending on the investment. eg currency trading is a good example.

The time window changes depending on the strength of external events eg a lot of technie guys stop using it if a large external event (eg pipeline blast) occurs.

This issue increasingly with oil at the moment is the number of external events eg russia peaking, pipes being blown up US/Suadi counter press briefings etc. the result is TA is not as helpful.

[Gandalf_the_White]

$this->bbcode_second_pass_quote('Revi', 'I') think that the price may dip a bit this next few weeks, but if Goldman-Sachs are right we may see it go up again soon:

http://www.bloomberg.com/apps/news?pid= ... fer=energy

They think that there will be an average of $141 in the second half of the year.

[UncoveringTruths]

Boy! These folks are a fickle bunch but we've seen them make these claims of "extra goo coming soon" before. It should have a little calming affect on the markets as they eat some more donkey $hit. Oh wait maybe its camel $hit.

$this->bbcode_second_pass_quote('', 'M')ay 16 (Bloomberg) -- Saudi Arabia, the world's largest oil exporter, will increase crude oil production by 300,000 barrels a day next month in response to customer requests.

The country will pump 9.45 million barrels a day in June, Saudi Oil Minister Ali al-Naimi said in Riyadh today, following a meeting between U.S. President George W. Bush Saudi Arabia's King Abdullah. Earlier today, U.S. officials including National Security Adviser Stephen Hadley had said Saudi Arabia's policy was to supply extra oil only if customers needed it.

``On May 10 we increased our response to our customers by 300,000 barrels because they asked for it,'' al-Naimi said. ``So our production for June will be 9,450,000 barrels per day. This is the request of about 50 customers worldwide.''

[Novus]

$this->bbcode_second_pass_quote('Gandalf_the_White', '
')b) that the higher prices go in the summer above $141 the lower they will go below it in the winter.

[Zardoz]

$this->bbcode_second_pass_quote('Novus', '.')..the new normal.