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Monday, 23 March 15
IS OIL GETTING READY TO PLUNGE BELOW $40? - FORBES
 KNOWLEDGE TO ELEVATE
In my last crude oil market update in late-February, I expressed my skepticism toward the oil price rebound. Since then, crude oil has given up its gains and fell to new lows in the past week. I have been consistently bearish on crude oil since publishing my viral crude oil crash warning in June 2014, just a couple weeks before it topped and fell from $105 to under $45 today. Many market participants have been expecting oil to finally bottom, but have been wrong each time as crude oil plunged to new lows.
I am still concerned that crude oil has lower to go before finally bottoming, but I am actively analyzing the technical situation to be sure. In January and February, West Texas Intermediate crude oil traded in a range between $44 and $55 per barrel, and finally broke underneath this range this week. This break below the $44 support level represents an important technical breakdown that may signal even more weakness ahead, provided that the bearish signal is not negated by a convincing break back above $44 (and, ideally, $55).
Brent crude oil is still in its trading range between $50 and $65 per barrel. Brent may try to test the $50 support level soon, and if it breaks and stays below that level, it would represent a notable bearish technical signal.
One of the reasons why I have been so skeptical of crude oil’s rally attempts so far is because the all-important $40 psychological level has not been reached yet. This level goes all the way back to the first Gulf War oil panic in 1990, and it doesn’t make sense that oil would fall so far without at least trying to touch $40.
Brent crude oil also bottomed at $40 per barrel during the Global Financial Crisis in early-2009:
In addition, the U.S. dollar’s relentless rise continues to put pressure on crude oil and other commodities due to their inverse relationship. The U.S. Dollar Index is still in a confirmed uptrend, but it is sitting just underneath its key 100 resistance level that must be surpassed to give another bullish signal. If the Dollar Index breaks above 100, it will likely contribute to another bearish move in crude oil. On the other hand, if the Dollar Index is unable to surpass 100 and experiences a technical breakdown below its uptrend lines, crude oil may bounce. How the Dollar Index acts at this level is vital for understanding crude oil’s next move.
The massive glut of crude oil will certainly not help prices recover anytime soon either. According to the EIA, commercial crude oil inventories are sitting at an eighty-year high of 458.5 million barrels. To make matters worse, Iran could add an additional million barrels of oil per day once it comes back online after a deal to lift sanctions – a scenario that I discussed in my original June 2014 oil crash warning. Adding to oil’s woes this week was a comment from an OPEC oil minister stating that the group has “no choice” but to maintain the current rate of oil production to preserve market share.
Another important, but little-discussed, scenario that could lead to crude oil prices hitting $40 or lower is if crude oil speculators finally liquidate their still-sizable long position of nearly 300,000 futures contracts in WTI crude. These crude oil speculators are considered to be the “dumb money” and were most bullish at the very top of the market in June 2014 before oil crashed.
Before markets bottom after a bear market, speculators typically liquidate or capitulate their bullish positions in a panic, which causes powerful sell-offs. This has not happened yet in crude oil and there is a big risk that this event is still ahead. Crude oil speculators had a flat position as recently as 2010, so it certainly isn’t inconceivable for them to go flat once again.
In addition, the commercial hedgers still have a significant short position of nearly 300,000 futures contracts, and they tend to have flat or even net long positions when commodities such as crude oil finally experience bottoms. This has not happened yet, which should be a reason to doubt that the bottom is in.
For now, I am watching if WTI crude oil can sustain its breakdown below $44 and if Brent crude oil can hit $50 or below. The U.S. dollar’s bullish trend should also remain intact in order for this bearish crude oil thesis to play out. If WTI reverses its recent bearish breakdown and rises above $44 and $55, and if Brent crude oil rises above its $65 resistance level, I would consider this bearish thesis nullified for the time being. I do not make hard predictions about short-term price movements, nor do I have to; I simply watch key psychological or technical levels and take a reactive approach. I always have a contingency plan to help determine when a trade thesis is nullified.
Source: Forbes | Hellenic Shipping News
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Monday, 17 July 23
APPROVED AMMONIA-FUELED CONTAINERSHIP - BENEFITS AND RISKS: REED SMITH
Following the news in Offshore Energy that Korea Maritime Consultants has secured approval in principle from the American Bureau of Shipping for it ...
Friday, 14 July 23
CLEAN COAL USE KEY TO DEEP CUTS IN EMISSIONS, STABLE ELECTRICITY SUPPLY - CHINA DAILY
China must push for the clean use of coal and step up integration of the dirty fuel with carbon capture, utilization and storage to achieve sustain ...
Thursday, 13 July 23
VIETNAM'S COAL EMISSIONS PRIMED FOR SURGE AFTER IMPORTS JUMP - REUTERS
Vietnam’s thermal power emissions are primed for a steep climb this summer after the country’s imports of thermal coal soared to their ...
Monday, 26 June 23
COAL PRODUCTION AND CONSUMPTION UP IN 2022 - EUROSTAT
In 2022, EU coal production and consumption continued to increase, reaching 349 million tonnes (+5% compared with the previous year) and 454 millio ...
Wednesday, 21 June 23
QATAR STRIKES SECOND BIG LNG SUPPLY DEAL WITH CHINA - REUTERS
Qatar on Tuesday secured its second large gas supply deal with a Chinese state-controlled company in less than a year, putting Asia clearly ahead i ...
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- Standard Chartered Bank - UAE
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- Eastern Coal Council - USA
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- London Commodity Brokers - England
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- McConnell Dowell - Australia
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- ICICI Bank Limited - India
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- Siam City Cement - Thailand
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- Romanian Commodities Exchange
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- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- The University of Queensland
- White Energy Company Limited
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- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
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- Agrawal Coal Company - India
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- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Ministry of Mines - Canada
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- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
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- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
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- VISA Power Limited - India
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- Power Finance Corporation Ltd., India
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- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
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- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
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- Coal and Oil Company - UAE
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- Goldman Sachs - Singapore
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- New Zealand Coal & Carbon
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- Eastern Energy - Thailand
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- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
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- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
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- Jorong Barutama Greston.PT - Indonesia
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- Bangladesh Power Developement Board
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- Commonwealth Bank - Australia
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- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
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- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
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- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
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- Xindia Steels Limited - India
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- Iligan Light & Power Inc, Philippines
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- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
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