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The price of oil

The price of oil is in an uptrend since 1998. From the point of view of fundamental analysis in the very long term, the engine of the increase in oil prices is the difference between two major trends: the "peak oil" and the increase in global demand for black gold . With technical analysis we can follow trends graphically this trend.

1. Inclined channel long term.
The price of oil is in an uptrend for more than a decade, only the historical increases in July and the 2008 crisis were able to get him out of this channel.
It seems likely that oil prices will remain in this channel much longer. Because basically all the forces of the market (producers and consumers) have reached some sort of consensus. Oil prices should not rise too much not to provoke a crisis, as in 2008, and should not fall too much for the pharaonic investment needed to continue oil production.

2. Horizontal channel medium term.
For 3 years, we are in an almost perfect world for the major players in the oil (producers and consumers). Oil prices stabilized in a horizontal channel between 75 and 110 dollars per barrel with an average price around $ 90 a barrel.
I find it difficult to keep the balance of the price of oil for a long time, in a globalized economy. But it is difficult to assess precisely when is breaking the horizontal channel (this season? Next?).

3. Perspectives.
The long-term price of oil (WTI) in the "long term" oblique bullish channel seems likely for a long time (between $ 75-80 and $ 130-150).
The "medium term" horizontal channel seems more fragile. A top out the channel, pendulum effect, open the door of $ 130-150. Which corresponds to the top of the inclined channel and long-term historical record of July 2008...
An outlet at the bottom of the horizontal channel medium term and long term oblique channel below $ 75 a barrel, seems unlikely because too devastating for the exploration, development of oil sands, heavy oil, the shorf deep off the oil shale ...
If this happened it would be a historic opportunity to invest for the long-term trend would not be questioned.
To summarize, within 1-3 years, there is a very strong probability that the price of oil is maintained above $ 75. Up "reasonable" is $ 110, and if high fever, the next vertex is $ 130-150.

Dr Thomas Chaize

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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