Energy report: Can weather/geopolitics save bull?

You’ve lost that bullish feeling, lost that bullish feeling. You’ve lost that bullish feeling and it’s gone, gone, gone!

Oil is trying to find that bullish passion that it lost sometime ago. Yet even after the big oil breakdown last week, the market failed to find the inspiration it needed to continue its assault on the downside. Oh sure, the bulls were bloodied last week as the PIIGS (Portugal, Italy, Ireland, Greece and Spain) started to fall apart and they are hesitant to step back into a market that has definably lost any semblance of what you would consider a bull market. Yet with a winter storm barring down on the Northeast and the heartland of the heating belt and the fact that the euro seemed to stabilize, oil tried to make a bit of a comeback.

Of course a little dash of geopolitical tension never hurts the oil market. It may not help it but it sure can’t hurt. Iran is flaunting that fact that it is enriching uranium, sending a strong message that they do not care what the rest of the world thinks. And why would they because they do not care what their own people think. Their illegitimately elected President and sphere of hatred says that Iran would start enriching uranium to 20% on its own if the world continued to play games with Iran. And true to its word, Iran today announced that it was indeed enriching uranium to 20%. Maybe he is just mad because he bet the Colts in the Super Bowl.

Nigerian rebels, after threatening all out war last week, have been making claims according to Bloomberg News that it “disabled” a trunk oil pipeline operated by Royal Dutch Shell Plc. That in and of itself fails to move the market especially in a world full of a glut of spare capacity, yet it is another reason someone may not want to be short.

Oil prices may try to test the breakout area between $73 and $74. At those levels we would recommend putting on short positions. As readers of the Daily Energy Report know we have been saying that we expect a move down towards $40. The daily chart on the March Crude seems to suggest that we could see a move down into the sixties very shortly.

Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at pflynn@pfgbest.com.

About the Author
Phil Flynn

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.

 

Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented by The PRICE Futures Group is from sources believed to be reliable and all information reported is subject to change without notice.


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