In yesterday's "Last Year's "Sell Oil" Not Working Very Well" we pointed out how important the breach of the $105 price level was.
$106.89 up 0.36. Here's more.
A threefer starting with MoneyBeat:
What Analysts are Saying About Oil and Iraq Now
The price of oil is at a nine-month high as the security situation in Iraq deteriorates.There is a problem with thinking that if oil goes through $115 it will stop 10 bucks higher.
Brent Crude topped $114 a barrel in early trading Friday for the first time since September, and U.S. crude oil futures pointed higher as at least one analyst pointed to the “clear and present danger” of the tensions in Iraq.
Oil-market analysts offer their perspective on what this means for the region, prices and the global economy.
Thina Saltvedt, chief analyst Macro/Oil at Nordea Bank:
“If Iraq, accounting for 3.7% of the world’s total oil production, suffers a serious disruption to its oil supplies, we will see a sharp upswing in oil prices as the OPEC effective spare capacity buffer is low, making the global oil market highly sensitive to further supply disturbances.
“If Iraqi oil production would fall back to the low levels seen during the invasion of Iraq in 2003, oil prices could easily rise by up to $30 a barrel as this would push the global spare capacity back to the lows when oil prices reached $150 a barrel in July 2008. High oil prices would put the world economic recovery at risk.”
David Hufton, managing director of PVM Oil Associates:
Calling the situation in Iraq a “clear and present danger,” Mr. Hufton added: “The deteriorating situation in Iraq could be the source of an oil price and therefore a financial shock and it should be sending economic-growth forecasters back to the drawing board.
“There can be no doubt that if Iraq’s southern oil operations are impacted Brent could reach $125 a barrel and beyond. Saudi Arabia may have 2 million barrels a day of capacity it can turn on reasonably quickly but that leaves no spare capacity margin.”...MORE
From Dragonfly Capital a look at resistance:
An Oil Gusher?
West Texas Intermediate Crude Oil ($CL_F, $USO) has been moving in a tightening triangle against long term resistance around 105. Since October it has moved through a series of patterns and gotten stronger every time. The first was a ‘W’ pattern that made a double bottom at 91-92 and then retraced half way following its completion. The next was a Bat harmonic that retraced over 78.6% of the Bat before reversing. That low at 97 in March also made the second point of an ascending triangle the top at 105. It is now back at 105 for the 4th time
and looking strong. A break over 105 will carry a Measured Move higher to 113 with only minor prior price history at 108 and 111 along the way. With all the congestion and coiling in this range a move higher could happen quickly as resistance exhausts itself. Are you ready for it?Finally, the Talking Numbers blog at Yahoo Finance:
This chart shows why oil could hit $150
...MORE
