OPEC Confirming Energy Analysis
OPEC Confirming Energy Analysis;
Oil Advance into Jan. ’18 On Track!
Dec. ’17 Could Time Initial Peak.
10/28/17 Weekly Re-Lay:
“Crude Oil, Unleaded Gas & Heating Oil re-energized their advances, fulfilling expectations for the current rallies to extend into late-month.
Unleaded Gas & Heating Oil have moved progressively higher since bottoming in sync with an 8-week low-low-low Cycle Progression – that was expected to spur an 8-week rally into early-Dec. However, Friday’s action added several key factors to the overall bullish argument for substantial advances to take hold in 3Q/4Q 2017:
Brent Crude exceeded $60/bbl for the first time in ~2 years. While this is more anecdotal & psychological – it is a key point for global oil traders and should not be underestimated.
Dec. Heating Oil & Unleaded Gas hit their highest levels since 3Q 2015 – a period of over two years.
Heating Oil & Unleaded Gas fulfilled Intra-Year V Reversals higher – closing above their Jan. ’17 highs. That also means they turned the intra-year trends up – a signal that should underpin prices into late-year.
And, finally validating all these technical & cyclical factors – that began to turn bullish in July 2017 – talk of OPEC extending production cuts at their next meeting in late-Nov. began to circulate through the markets.
As is so often the case, the fundamental factors kick in after a large chunk of the move is already complete. So, in theory, the fundamentals are never/rarely wrong, but they are often ‘very late to the party’.
On a 1 – 2 year basis, one other factor could corroborate this potential for rallies into Dec. 2017. Crude has a 50-week high (Feb. 2015)–low (Jan. 2016)–high (Jan 2017)–high (mid-Dec. 2017) Cycle Sequence coming into play at that time and projecting the next significant peak.
On a near-term basis, Crude has the potential to extend a ~30-degree low-high-(high) Cycle Progression – and a ~90-degree high-high cycle – if it sets a 1 – 2 week peak on Oct. 30 – 31.
That would allow time for some consolidation and then an additional spike high on Nov. 8 – 13 – the next phase of Crude’s 33 – 37 day low-low-low-low-(high?) Cycle Progression.”
The latest OPEC communique validates the overall outlook for oil prices to advance in 3Q & 4Q 2017 with an ultimate objective being a Jan. 2018 peak. The Energy complex is reinforcing mid-year buy signals in Unleaded Gas & Heating Oil & Crude Oil analysis projecting an intervening surge from early-Oct. into Nov. 8 – 13 as part of larger, overall advance into early-Dec…. and then ultimately into Jan. 2018.
See Weekly Re-Lay & INSIIDE Track for additional analysis and/or trading strategies.