Sponsor

2016/11/01

Crude Crashes: Here's What You Need to Know...

Rude Awakening
November 1, 2016
Archives | Unsubscribe
Crude Crashes

Crude Crashes: Here's What You Need to Know...

  • Oil rolls over
  • OPEC to the rescue?
  • Plus: More whipsaw action

Greg Guenthner coming to you from Baltimore, MD...

Greg GuenthnerWe see a long future ahead in which fossil fuels will be part of the energy mix…

This little tidbit is courtesy of Saudi Arabian energy minister and Saudi Aramco chairman Khalid Al-Falih. According to Al-Falih, demand for oil will continue to rise despite the world's efforts to combat climate change.

Is the Saudi energy minister just blowing smoke?

Probably not. Despite all the advances in renewable energy technology and the lip service it receives from governments across the developed world, the oil barrel isn't going obsolete anytime soon.

But the price of oil is a completely different story.

That's right-- crude is rolling over. Again…

"Oil prices dropped about $2 a barrel on Monday to hit one-months low on doubts about OPEC's planned production cut and a build in U.S. crude inventories at the Cushing, Oklahoma storage hub," Business Insider reports. "Officials from the Organization of the Petroleum Exporting Countries and non-member producers met in Vienna on Saturday, but did not come to specific terms, agreeing only to meet again before a scheduled regular OPEC meeting on Nov. 30."

It looks like oil traders are getting a little tired of OPEC's shenanigans…

Crude Rolls Over

After steadily climbing since early August and topping $50 by mid-October, light crude has taken a long walk over off a short pier. Yesterday's drop of nearly 4% means crude has coughed up all of its gains from the past month.

Earlier this year, we told you how oil has been consistently victimized by whipsaw market action. The above chart perfectly illustrates this point.

In early June, oil prices quickly jumped above $50 a barrel for the first time in nearly a year. U.S. stockpiles were down and China demand came in stronger than anticipated. Both of these factors helped push oil over the hump. Crude even managed to top $51.

But these gains were short lived. As it turns out, the oil bears were just taking a quick nap. After topping out, oil prices fell for six straight days. It was the longest bearish run for oil since early 2016 when prices plummeted below $30 a barrel.

Of course, oil and gas stocks took a big hit to start the week now that crude has turned south. The Energy Select Sector SPDR (NYSE:XLE) continues dance around its 50-day moving average, sending mixed signals to traders that are trying to find an edge in this market.

As crude fails to hold near $50 this week, the probability of a year-end rally dwindles. For now, crude is acting like the major averages: stuck in a choppy range.

We're combating these painful whipsaw moves by keeping our short-term trading positions to a minimum. The worst thing we can do is force trades that just aren't there—especially in ornery oil stocks. It's best to simply cut our losses as quickly as possible and wait for more favorable market conditions.

Don't let the market grind your portfolio to a pulp…

Sincerely,

Greg Guenthner

[Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner]


[VIDEO:] Will You Buy Gold After Watching This 1:42 Clip?

…And all it took was 1 minute and 42 seconds.

Baltimore man shows readers, live on camera, how to instantly get "Cash FROM Gold."

If you've ever bought gold… considered buying gold miners… or traded ETFs…

You MUST see this shocking gold trick…

Click here to get started.


Rude Numbers

When to Buy... When to Sell
18

points dropped from the Dow Jones Industrial Average yesterday. That marks the third straight day of losses for the big board...

31%

of all stocks trading on major U.S. exchanges are now above their respective 50-day moving averages...

$47.09

buys a barrel of crude today. Oil is trying to sneak higher this morning after yesterday's big drop...

$2.96

is the spot price for natural gas this morning. Natty is cratering today. It's down more than 2% in early trade...

2,124

marks the spot for S&P futures just before the morning bell. Stocks are set to open in the green today...


Ignore At Your Own Peril

Today's Must Read Links

Add rude@agorafinancial.com to your address book:

Whitelist us

Additional Articles & Commentary:

Daily Reckoning Website

Join the conversation! Follow us on social media:

Facebook LinkedIn Twitter RSS Feed Google Plus YouTube
The Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Agora Financial delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from The Rude Awakening, click here.

Please read our Privacy Statement. For any further comments or concerns please email us at rude@agorafinancial.com. If you are you having trouble receiving your Rude Awakening subscription, you can ensure its arrival in your mailbox by whitelisting The Rude Awakening.

Agora Financial© 2016 Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice.

We expressly forbid our writers from having a financial interest in any security they personally recommend to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

No comments:

Post a Comment

Keep a civil tongue.

Label Cloud

Technology (1464) News (793) Military (646) Microsoft (542) Business (487) Software (394) Developer (382) Music (360) Books (357) Audio (316) Government (308) Security (300) Love (262) Apple (242) Storage (236) Dungeons and Dragons (228) Funny (209) Google (194) Cooking (187) Yahoo (186) Mobile (179) Adobe (177) Wishlist (159) AMD (155) Education (151) Drugs (145) Astrology (139) Local (137) Art (134) Investing (127) Shopping (124) Hardware (120) Movies (119) Sports (109) Neatorama (94) Blogger (93) Christian (67) Mozilla (61) Dictionary (59) Science (59) Entertainment (50) Jewelry (50) Pharmacy (50) Weather (48) Video Games (44) Television (36) VoIP (25) meta (23) Holidays (14)

Popular Posts