crude

The red line on the chart shows Illinois Sweet Crude oil prices adjusted for inflation in February 2022 dollars. The black line indicates the nominal price (in other words the price you would have actually paid at the time). The current price for a barrel of Illinois Crude Oil as of March 11, 2022 was $84.70, up significantly from recent lows.

In What Universe is $100+ Crude Oil Cheap?

Everyone knows that Gasoline and Crude oil are currently expensive right?  I recently updated several of our charts and when I got to the Crude Oil vs Gold chart I was in for a shock. According to that chart either Gold is expensive or Crude oil is cheap. Not as cheap as it was in 2020 but still historically cheap but it is actually simply approaching the long-term average ratio.

The thinking of the ratio is this… if the value of dollars is constantly changing the best way to tell if a commodity is expensive is to compare it to other commodities. Historically, gold has been money so what better commodity to compare to? 

Looking at the chart of Gold vs. Oil we see that oil is still relatively cheaper than gold. Now as we have said many times Gold is a Crisis hedge so in times of crisis, gold appreciates. Therefore, we would expect gold to currently be expensive and it is, but it is not currently at all-time highs. Read the Full updated Gold vs. Oil Article here.

In What Universe is $100+ Crude Oil Cheap? Read More »

Is Saudi Arabia Still an 800 Pound Gorilla

Almost everyone has heard the old joke, “Where does an 800 pound Gorilla sleep?” The answer of course is, “Anywhere he wants to”.  For most of the last century Saudi Arabia has been the 800 pound gorilla of the oil industry. But recently people have begun wondering whether Saudi Arabia is losing some clout. In today’s article Tsvetana Paraskova of Oilprice.com will look at just where Saudi Arabia stands.

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NYMEX Crude Oil

Is A Big Move In Oil Prices Due?

On November 30th 2016, Bloomberg trumpeted the following headline, OPEC Confounds Skeptics, Agrees to First Oil Cuts in 8 Years. On the day before, (i.e. November 29th) oil prices had plunged 2.5% and the NYMEX Oil ETF was trading at $11.34 and the news drove the price up to $13.05 by January 6th, 2017 where it peaked and it’s been downhill ever since.

Was this a case of “Buy the Rumor Sell the News”?  Not quite since it did climb for a couple of months before reality set in, but the OPEC deal was doomed to fail pretty much from the beginning. First of all, U.S. Shale Oil wasn’t part of the deal and secondly the targets were set at previous peak production so there really weren’t any “cuts” simply limits to future growth. After falling to $9.89 on June 21st the price has rebounded a bit moving back above support so we could easily see a move to the resistance line or above. So have we seen the bottom and is this the beginning of  a new rally?    Or is this a counter-trend rally to the top of the channel or simply a fake and the beginning of a correction to the downside? In today’s post, Brian Noble looks at the question, “Is a big move in Oil Prices Due?”~ Tim McMahon, editor. 

Is A Big Move In Oil Prices Due? Read More »

China Is Winning the Energy Race

It’s no longer 1973, when President Nixon could declare that our status as top energy consumer was “good. That means we are the richest, strongest people in the world.” Today, bragging about winning the energy-eating competition doesn’t gain you any brownie points. Which is probably why Chinese authorities were quick to reject the IEA data as “unreliable,” choosing instead to focus on their intention to sink about 5 trillion RMB (about US$750 billion) into renewable energy projects.
Despite the denials, a new age in the history of energy has begun, and the implications are enormous. China may not want to accept the honors, but the reality is that it’s now the most important player on energy’s demand side.

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