Archive for Energy

COT Futures: This Week’s Energy Charts

By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday May 10th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

The energy markets with higher speculator bets this week were Natural Gas (5,177 contracts) and the Bloomberg Commodity Index (91 contracts).

The markets with declining speculator bets this week were WTI Crude Oil (-10,898 contracts), Brent Crude Oil (-3,897 contracts), Heating Oil (-9,228 contracts) and Gasoline (-7,003 contracts).


Data Snapshot of Commodity Market Traders | Columns Legend
May-10-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index
WTI Crude 1,736,594 0 310,803 2 -354,479 98 43,676 77
Gold 571,447 34 193,315 40 -227,756 57 34,441 57
Silver 142,752 9 19,082 41 -30,519 69 11,437 9
Copper 184,502 15 -22,626 26 19,249 73 3,377 45
Palladium 8,832 11 -3,245 3 3,434 96 -189 33
Platinum 66,064 32 1,363 5 -5,373 98 4,010 18
Natural Gas 1,108,451 6 -112,529 45 64,006 51 48,523 100
Brent 173,911 19 -31,215 59 30,562 44 653 18
Heating Oil 349,618 31 6,455 52 -32,434 37 25,979 88
Soybeans 694,454 20 174,608 72 -147,698 33 -26,910 26
Corn 1,510,783 23 470,908 90 -415,345 13 -55,563 11
Coffee 212,659 5 32,555 69 -33,559 37 1,004 0
Sugar 797,453 0 187,185 75 -220,611 26 33,426 49
Wheat 308,326 0 21,686 48 -17,779 34 -3,907 92

 


WTI Crude Oil Futures:

WTI Crude Oil Futures COT ChartThe WTI Crude Oil Futures large speculator standing this week equaled a net position of 310,803 contracts in the data reported through Tuesday. This was a weekly fall of -10,898 contracts from the previous week which had a total of 321,701 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 2.1 percent. The commercials are Bullish-Extreme with a score of 98.5 percent and the small traders (not shown in chart) are Bullish with a score of 76.6 percent.

WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 23.9 35.4 5.2
– Percent of Open Interest Shorts: 6.0 55.8 2.7
– Net Position: 310,803 -354,479 43,676
– Gross Longs: 415,170 614,716 90,689
– Gross Shorts: 104,367 969,195 47,013
– Long to Short Ratio: 4.0 to 1 0.6 to 1 1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 2.1 98.5 76.6
– Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -2.8 2.2 3.2

 


Brent Crude Oil Futures:

Brent Last Day Crude Oil Futures COT ChartThe Brent Crude Oil Futures large speculator standing this week equaled a net position of -31,215 contracts in the data reported through Tuesday. This was a weekly fall of -3,897 contracts from the previous week which had a total of -27,318 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 58.8 percent. The commercials are Bearish with a score of 44.1 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.0 percent.

Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 19.2 48.1 5.0
– Percent of Open Interest Shorts: 37.2 30.5 4.6
– Net Position: -31,215 30,562 653
– Gross Longs: 33,423 83,639 8,698
– Gross Shorts: 64,638 53,077 8,045
– Long to Short Ratio: 0.5 to 1 1.6 to 1 1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 58.8 44.1 18.0
– Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -10.1 14.9 -40.0

 


Natural Gas Futures:

Natural Gas Futures COT ChartThe Natural Gas Futures large speculator standing this week equaled a net position of -112,529 contracts in the data reported through Tuesday. This was a weekly boost of 5,177 contracts from the previous week which had a total of -117,706 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 44.8 percent. The commercials are Bullish with a score of 51.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 100.0 percent.

Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 21.1 37.9 6.6
– Percent of Open Interest Shorts: 31.3 32.2 2.2
– Net Position: -112,529 64,006 48,523
– Gross Longs: 234,306 420,582 73,144
– Gross Shorts: 346,835 356,576 24,621
– Long to Short Ratio: 0.7 to 1 1.2 to 1 3.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 44.8 51.0 100.0
– Strength Index Reading (3 Year Range): Bearish Bullish Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: 7.5 -9.1 9.6

 


Gasoline Blendstock Futures:

RBOB Gasoline Energy Futures COT ChartThe Gasoline Blendstock Futures large speculator standing this week equaled a net position of 31,378 contracts in the data reported through Tuesday. This was a weekly decline of -7,003 contracts from the previous week which had a total of 38,381 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 2.1 percent. The commercials are Bullish-Extreme with a score of 93.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 97.3 percent.

Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 24.6 50.9 8.3
– Percent of Open Interest Shorts: 14.2 65.6 4.0
– Net Position: 31,378 -44,072 12,694
– Gross Longs: 73,929 152,809 24,799
– Gross Shorts: 42,551 196,881 12,105
– Long to Short Ratio: 1.7 to 1 0.8 to 1 2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 2.1 93.0 97.3
– Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -9.0 3.7 34.1

 


#2 Heating Oil NY-Harbor Futures:

NY Harbor Heating Oil Energy Futures COT ChartThe #2 Heating Oil NY-Harbor Futures large speculator standing this week equaled a net position of 6,455 contracts in the data reported through Tuesday. This was a weekly lowering of -9,228 contracts from the previous week which had a total of 15,683 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.9 percent. The commercials are Bearish with a score of 36.7 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 88.4 percent.

Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 17.0 50.8 14.4
– Percent of Open Interest Shorts: 15.1 60.1 6.9
– Net Position: 6,455 -32,434 25,979
– Gross Longs: 59,340 177,626 50,210
– Gross Shorts: 52,885 210,060 24,231
– Long to Short Ratio: 1.1 to 1 0.8 to 1 2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 51.9 36.7 88.4
– Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: 4.2 -10.3 23.6

 


Bloomberg Commodity Index Futures:

Bloomberg Commodity Index Futures COT ChartThe Bloomberg Commodity Index Futures large speculator standing this week equaled a net position of -13,263 contracts in the data reported through Tuesday. This was a weekly lift of 91 contracts from the previous week which had a total of -13,354 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 56.8 percent. The commercials are Bearish with a score of 41.9 percent and the small traders (not shown in chart) are Bearish with a score of 41.5 percent.

Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 57.7 36.7 2.0
– Percent of Open Interest Shorts: 96.2 0.0 0.2
– Net Position: -13,263 12,644 619
– Gross Longs: 19,888 12,644 703
– Gross Shorts: 33,151 0 84
– Long to Short Ratio: 0.6 to 1 inf to 1 8.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 56.8 41.9 41.5
– Strength Index Reading (3 Year Range): Bullish Bearish Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -15.0 16.3 -11.1

 


Article By InvestMacroReceive our weekly COT Reports by Email

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.

The Gargantuan Task Of Replacing Russian Oil

By ValueWalk.com 

The economic sanctions against Russia continue, and so do the drastic changes that may be generated in the global economy. With the head of the European Commission, Ursula von der Leyen, reinstating the European Union’s urge to completely renounce Russian oil in the next six months —and before the end of the year, products derived from Russian crude oil— the global market is in the dark.

How would the global economy without Russian oil look like?

Sanctions Background

The European Commission’s announcement is full of complexities, not only because it would mean the most drastic economic sanction against Russia —it is estimated that 60% of Russian oil exports are for OECD countries in Europe— but also because several countries in the block are highly dependent on Russian oil to keep their industries running.

The new package of measures must be unanimously approved by the Member States in order to be executed, since questions such as where the crude oil will come from once the Russian supply ceases completely and what impact this will have on prices, must be taken into account.

According to an S&P Global report updated on May 10, “The conflict and its economic consequences have since displaced more than 2 million barrels per day from Russia. The EU’s oil sanctions are likely to reshape global energy flows as well as increase energy price pressures across the region.”

Critical Role

Stats from the International Energy Agency (IEA) in January this year show that Russian oil production reached 11.3 million barrels per day (mb/d), only behind Saudi Arabia and the U.S. —the largest producers on the planet.

However, the Russian industry has managed to establish itself as the largest exporter of refined oil to global markets and the second —after Saudi Arabia— in crude oil international sales.

Now, according to information from the IEA, 60% of Russian oil exports go to OECD countries in Europe —20% go to China— which includes countries like Germany or France.

IEA figures show that of the total German oil purchases, 30% comes from the Russian industry —the share reaches 80% in countries like Finland, for example.

Russia provides around 40% of the gas Europe consumes and accounts for 16% of the world’s supply. In addition, it is the third-largest oil producer in the world; before the war broke out in Ukraine, it is estimated that Russian exports of crude oil and refined products covered around 7.5% of world oil demand.

For the U.S., Russian oil accounted for about 3% of all crude shipments that reached that country last year, according to data from the US Energy Information Administration. Before the war in Ukraine, U.S. imports of Russian crude in 2022 were falling at the slowest annual pace since 2017, according to the intelligence firm Kpler.

Outlook

Replacing Russian oil is a tough, slow task, as not many nations can fill in and supply part of Russia’s quota, both on a global scale and from a market perspective.

First calculations by the International Energy Agency, OPEC, and private consulting companies point to countries such as Saudi Arabia, the United Arab Emirates, and Kuwait being capable of quickly answering the global demand for more oil amid the current crisis.

According to the most optimistic estimates, Iran and Venezuela could add over 1.5 million barrels per day, should geopolitical and logistical issues be overcome.

As for Iran, the nuclear agreement with Tehran would need reworking to lift restrictions on trade in Iranian crude. In the case of Venezuela, billions of dollars are needed, in addition to months to prep up the country’s oil infrastructure.

So, substituting Russian oil seems a gargantuan task in a period when prices could continue to rise. This would cause inflation to continue to rise in countries that have nothing to do with the war in Ukraine.

By ValueWalk.com

 

Electric eels inspired the first battery two centuries ago and now point a way to future battery technologies

By Timothy J. Jorgensen, Georgetown University 

As the world’s need for large amounts of portable energy grows at an ever-increasing pace, many innovators have sought to replace current battery technology with something better.

Italian physicist Alessandro Volta tapped into fundamental electrochemical principles when he invented the first battery in 1800. Essentially, the physical joining of two different materials, usually metals, generates a chemical reaction that results in the flow of electrons from one material to the other. That stream of electrons represents portable energy that can be harnessed to generate power.

The first materials people employed to make batteries were copper and zinc. Today’s best batteries – those that produce the highest electrical output in the smallest possible size – pair the metal lithium with one of several different metallic compounds. There have been steady improvements over the centuries, but modern batteries rely on the same strategy as that of Volta: pair together materials that can generate an electrochemical reaction and snatch the electrons that are produced.

But as I describe in my book “Spark: The Life of Electricity and the Electricity of Life,” even before humanmade batteries started generating electric current, electric fishes, such as the saltwater torpedo fish (Torpedo torpedo) of the Mediterranean and especially the various freshwater electric eel species of South America (order Gymnotiformes) were well known to produce electrical outputs of stunning proportions. In fact, electric fishes inspired Volta to conduct the original research that ultimately led to his battery, and today’s battery scientists still look to these electrifying animals for ideas.

Copying the eel’s electric organ

Prior to Volta’s battery, the only way for people to generate electricity was to rub various materials together, typically silk on glass, and to capture the resulting static electricity. This was neither an easy nor practical way to generate useful electrical power.

Volta knew electric fishes had an internal organ specifically devoted to generating electricity. He reasoned that if he could mimic its workings, he might be able to find a novel way to generate electricity.

The electric organ of a fish is composed of long stacks of cells that look very much like a roll of coins. So Volta cut out coinlike disks from sheets of various materials and started stacking them, in different sequences, to see if he could find any combination that would produce electricity. These stacking experiments kept yielding negative results until he tried pairing copper disks with zinc ones, while separating the stacked pairs with paper disks wetted with saltwater.

This sequence of copper-zinc-paper fortuitously produced electricity, and the electrical output was proportionate to the height of the stack. Volta thought he had uncovered the secret of how eels generate their electricity and that he had actually produced an artificial version of the electric organ of fish, so he initially called his discovery an “artificial electric organ.” But it was not.

What really makes eels electrifying

Scientists now know the electrochemical reactions between dissimilar materials that Volta discovered have nothing to do with the way an electric eel generates its electricity. Rather, the eel uses an approach similar to the way our nerve cells generate their electrical signals, but on a much grander scale.

Specialized cells within the eel’s electric organ pump ions across a semipermeable membrane barrier to produce an electrical charge difference between the inside versus the outside of the membrane. When microscopic gates in the membrane open, the rapid flow of ions from one side of the membrane to the other generates an electrical current. The eel is able to simultaneously open all of its membrane gates at will to generate a huge jolt of electricity, which it unleashes in a targeted fashion upon its prey.

Electric eels don’t shock their prey to death; they just electrically stun it before attacking. An eel can generate hundreds of volts of electricity (American household outlets are 110 volts), but the eel’s voltage does not push enough current (amperage), for a long enough time, to kill. Each electric pulse from an eel lasts only a couple thousandths of a second and delivers less than 1 amp. That’s just 5% of household amperage.

This is similar to how electric fences work, delivering very short pulses of high-voltage electricity, but with very low amperage. They thus shock but do not kill bears or other animal intruders that try to get through them. It is also similar to a modern Taser electroshock weapon, which works by quickly delivering an extremely high-voltage pulse (about 50,000 volts) carrying very low amperage (just a few milliamps).

Modern attempts to mimic the eel

Like Volta, some modern electrical scientists searching to transform battery technology find their inspiration in electric eels.

A team of scientists from the United States and Switzerland is currently working on a new type of battery inspired by eels. They envision that their soft and flexible battery might someday be useful for internally powering medical implants and soft robots. But the team admits they have a long way to go. “The electric organs in eels are incredibly sophisticated; they’re far better at generating power than we are,” lamented Michael Mayer, a team member from the University of Fribourg. So, the eel research continues.

In 2019, the Nobel Prize in Chemistry was awarded to the three scientists who developed the lithium-ion battery. In conferring the award, the Royal Swedish Academy of Sciences asserted that the awardees’ work had “laid the foundation of a wireless, fossil fuel-free society.”

The “wireless” part is definitely true, since lithium-ion batteries now power virtually all handheld wireless devices. We’ll have to wait and see about the “fossil fuel-free society” claim, because today’s lithium-ion batteries are recharged with electricity often generated by burning fossil fuels. No mention was made of the contributions of electric eels.

Later that same year, though, scientists from the Smithsonian Institution announced their discovery of a new South American species of electric eel; this one is notably the strongest known bioelectricity generator on Earth. Researchers recorded the electrical discharge of a single eel at 860 volts, well above that of the previous record-holding eel species, Electrophorus electricus, that clocked in at 650 volts, and 200-fold higher that the top voltage of a single lithium-ion battery (4.2 volts).

Just as we humans try to congratulate ourselves on the greatness of our latest portable energy source, the electric eels continue to humble us with theirs.The Conversation

About the Author:

Timothy J. Jorgensen, Director of the Health Physics and Radiation Protection Graduate Program and Professor of Radiation Medicine, Georgetown University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

USOIL Ending Diagonal to Complete Intermediate Impulse

By Orbex

USOIL shows the development of the final part of the global impulse wave of the cycle degree. The final primary wave ⑤ takes the form of an intermediate impulse.

In early April, an intermediate correction wave (4) ended in the form of a minor zigzag. Prices then began to rise in the intermediate wave (5). We see that sub-waves 1 and 2 have a corrective structure. Thus, the entire wave (5) can take the form of an ending diagonal 1-2-3-4-5, as shown in the chart.

The end of this construction is possible near 124.76. At that level, wave (5) will be at the 50% Fibonacci extension of impulse (3). If this level is broken, prices could rise even higher to 132.24. At that level, wave (5) will be at 61.8% of impulse (3).

Let’s consider an alternative scenario in which the construction of the intermediate correction (4) has not completed yet. Perhaps it will have a horizontal triple three W-X-Y-X-Z pattern.

The minor sub-waves W-X-Y-X look completed. A downward movement is now likely in the actionary sub-wave Z. This could take the form of a minute simple zigzag ⓐ-ⓑ-ⓒ.

Oil prices could fall to 90.39. At that level, intermediate correction (4) will be at 61.8% of impulse (3).

After the end of the sideways movement, the market is likely to grow above the maximum of 129.56.

Test your strategy on how oil will fare with Orbex – Open your account now. 


Orbex-LogoArticle by Orbex

Orbex is a fully licensed broker that was established in 2011. Founded with a mission to serve its traders responsibly and provides traders with access to the world’s largest and most liquid financial markets. www.orbex.com

 

COT Futures: This Week’s Energy Markets Charts

By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter

COT_Commodities_OI

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday May 3rd 2022 and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

The markets with higher speculator bets this week were WTI Crude Oil (5,638 contracts) and Brent Crude Oil (11,213 contracts) while the markets with lower speculator bets this week were Natural Gas (-326 contracts), Heating Oil (-9,228 contracts), Gasoline (-860 contracts) and the Bloomberg Commodity Index (-2,138 contracts).


Data Snapshot of Commodity Market Traders | Columns Legend
May-03-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index
WTI Crude 1,751,564 2 321,701 6 -366,213 94 44,512 78
Gold 560,441 31 199,168 42 -231,852 55 32,684 57
Silver 137,692 5 28,068 50 -39,317 60 11,249 8
Copper 185,255 16 -15,623 31 10,080 66 5,543 57
Palladium 7,638 6 -2,752 6 2,455 90 297 61
Platinum 66,545 33 -1,541 1 -3,667 100 5,208 35
Natural Gas 1,138,319 12 -117,706 43 72,861 54 44,845 92
Brent 168,128 14 -27,318 65 26,014 37 1,304 27
Heating Oil 349,618 31 6,455 52 -32,434 37 25,979 88
Soybeans 700,856 22 190,402 77 -165,353 27 -25,049 29
Corn 1,513,880 23 501,865 94 -451,210 8 -50,655 14
Coffee 206,337 1 40,697 77 -43,007 28 2,310 5
Sugar 818,627 1 201,592 78 -236,394 23 34,802 51
Wheat 319,233 0 20,012 60 -14,225 30 -5,787 82

 


WTI Crude Oil Futures:

WTI Crude Oil Futures COT ChartThe WTI Crude Oil Futures large speculator standing this week reached a net position of 321,701 contracts in the data reported through Tuesday. This was a weekly gain of 5,638 contracts from the previous week which had a total of 316,063 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 5.9 percent. The commercials are Bullish-Extreme with a score of 93.9 percent and the small traders (not shown in chart) are Bullish with a score of 77.7 percent.

WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 24.0 35.4 5.2
– Percent of Open Interest Shorts: 5.6 56.3 2.6
– Net Position: 321,701 -366,213 44,512
– Gross Longs: 419,692 620,327 90,371
– Gross Shorts: 97,991 986,540 45,859
– Long to Short Ratio: 4.3 to 1 0.6 to 1 2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 5.9 93.9 77.7
– Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -6.4 5.4 6.2

 


Brent Crude Oil Futures:

Brent Last Day Crude Oil Futures COT ChartThe Brent Crude Oil Futures large speculator standing this week reached a net position of -27,318 contracts in the data reported through Tuesday. This was a weekly increase of 11,213 contracts from the previous week which had a total of -38,531 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 65.4 percent. The commercials are Bearish with a score of 36.6 percent and the small traders (not shown in chart) are Bearish with a score of 26.9 percent.

Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 20.6 46.7 4.1
– Percent of Open Interest Shorts: 36.9 31.2 3.3
– Net Position: -27,318 26,014 1,304
– Gross Longs: 34,685 78,491 6,840
– Gross Shorts: 62,003 52,477 5,536
– Long to Short Ratio: 0.6 to 1 1.5 to 1 1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 65.4 36.6 26.9
– Strength Index Reading (3 Year Range): Bullish Bearish Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -4.5 5.6 -9.8

 


Natural Gas Futures:

Natural Gas Futures COT ChartThe Natural Gas Futures large speculator standing this week reached a net position of -117,706 contracts in the data reported through Tuesday. This was a weekly reduction of -326 contracts from the previous week which had a total of -117,380 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 43.3 percent. The commercials are Bullish with a score of 53.8 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 92.3 percent.

Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 21.7 38.9 6.4
– Percent of Open Interest Shorts: 32.0 32.5 2.5
– Net Position: -117,706 72,861 44,845
– Gross Longs: 247,092 442,604 72,900
– Gross Shorts: 364,798 369,743 28,055
– Long to Short Ratio: 0.7 to 1 1.2 to 1 2.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 43.3 53.8 92.3
– Strength Index Reading (3 Year Range): Bearish Bullish Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: 9.5 -11.0 7.5

 


Gasoline Blendstock Futures:

RBOB Gasoline Energy Futures COT ChartThe Gasoline Blendstock Futures large speculator standing this week reached a net position of 38,381 contracts in the data reported through Tuesday. This was a weekly decline of -860 contracts from the previous week which had a total of 39,241 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 9.2 percent. The commercials are Bullish-Extreme with a score of 88.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 83.4 percent.

Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 25.5 52.1 7.3
– Percent of Open Interest Shorts: 13.1 68.0 3.9
– Net Position: 38,381 -48,991 10,610
– Gross Longs: 79,017 161,247 22,690
– Gross Shorts: 40,636 210,238 12,080
– Long to Short Ratio: 1.9 to 1 0.8 to 1 1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 9.2 88.0 83.4
– Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -10.2 4.7 35.3

 


#2 Heating Oil NY-Harbor Futures:

NY Harbor Heating Oil Energy Futures COT ChartThe #2 Heating Oil NY-Harbor Futures large speculator standing this week reached a net position of 6,455 contracts in the data reported through Tuesday. This was a weekly fall of -9,228 contracts from the previous week which had a total of 15,683 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.9 percent. The commercials are Bearish with a score of 36.7 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 88.4 percent.

Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 17.0 50.8 14.4
– Percent of Open Interest Shorts: 15.1 60.1 6.9
– Net Position: 6,455 -32,434 25,979
– Gross Longs: 59,340 177,626 50,210
– Gross Shorts: 52,885 210,060 24,231
– Long to Short Ratio: 1.1 to 1 0.8 to 1 2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 51.9 36.7 88.4
– Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: 4.2 -10.3 23.6

 


Bloomberg Commodity Index Futures:

Bloomberg Commodity Index Futures COT ChartThe Bloomberg Commodity Index Futures large speculator standing this week reached a net position of -13,354 contracts in the data reported through Tuesday. This was a weekly fall of -2,138 contracts from the previous week which had a total of -11,216 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 56.4 percent. The commercials are Bearish with a score of 42.0 percent and the small traders (not shown in chart) are Bearish with a score of 44.0 percent.

Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 58.2 36.0 2.1
– Percent of Open Interest Shorts: 96.2 0.0 0.2
– Net Position: -13,354 12,665 689
– Gross Longs: 20,458 12,665 743
– Gross Shorts: 33,812 0 54
– Long to Short Ratio: 0.6 to 1 inf to 1 13.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 56.4 42.0 44.0
– Strength Index Reading (3 Year Range): Bullish Bearish Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -4.0 4.1 -1.5

 


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*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.

Why Bulgaria and Poland can withstand Russia cutting off their gas supply

By Alexander Mihailov, University of Reading 

Russian energy giant Gazprom has completely cut off gas supplies to Poland and Bulgaria. Both countries are apparently being punished for refusing Russia’s demand that they pay for their gas in roubles.

Other EU countries have also refused to pay in Russian currency (doing so would provide a boost to the Russian economy), but so far only Bulgaria and Poland have had their supply cut.

The immediate response from Poland has been that it can “manage” without Russian gas, with storage levels high and demand decreasing as the weather gets warmer. Bulgaria meanwhile, has accused Gazprom of a serious breach of contract, and is in talks with EU allies about maintaining supplies.

It will not be easy. For while Bulgaria can gradually switch away from Russian gas and oil, an abrupt halt will cause serious worries. Alternative supplies from the likes of Azerbaijan will not be enough.

In the longer term, one option is to continue with the (currently abandoned) completion of Bulgaria’s second nuclear power plant near the town of Belene on the south bank of the Danube river. Along with Poland, Germany and the rest of the EU, Bulgaria will also look to increase its reliance on Norway, the Middle East and north Africa. And there will be calls across the EU to speed up a switch to renewable energy sources such as solar and wind power.

All of these moves will do serious harm to Russia’s economy. So why is it turning off the taps? And why is it targeting these two countries in particular?

We can make a decent guess that the main motive is to cause economic difficulty and political division in Poland and Bulgaria, and to challenge their support for Ukraine. Vladimir Putin will no doubt enjoy treating this as an opportunity to antagonise both Nato and the EU.

Historically, Russia also has form in seeking to undermine the economic and political independence of these two countries. A pact between the Soviet Union and Nazi Germany in 1939 denied the very existence of a Polish nation, and aimed to share its land. Similarly, Russia’s policy towards Bulgaria for over 100 years has been geared towards political, cultural and economic dominance.

By cutting off gas supplies, Russia has landed its latest economic blow against Poland and Bulgaria. But with international support, it is a blow that can be withstood.

Chart showing level of dependency on Russian gas.
Dependency.
Statista

My own economic research into social learning suggests that people, as well as business and wider societies, continually adapt positively to evolving situations.

Part of my research involved developing an economic model which shows how populations react to economic incentives and pressures, and how this is influenced by their historic experiences.

Evolutionary economics

I also examined the link between how economic incentives (such as perceived costs and benefits) and social preferences played a role in the rise and fall of communism. Put simply, we concluded that for thousands of years, human societies have evolved economically by experimenting and learning about their environment. They have become adept at responding to how it functions and changes, sometimes gradually, sometimes abruptly.

Applied to the situation today, the key message is that EU countries will eventually adapt to making a switch away from heavy dependence on Russian energy. This will be costly in the short run, but viable and beneficial in the long run.

So while there will undoubtedly be energy shortages caused by Russia using gas as what the president of the European Commission described as an “unjustified and unacceptable … instrument of blackmail”, in the long term, everything can change with new suppliers and alternative sources.

Poland and Bulgaria are no longer obedient vassals of Russia. And while they will both suffer difficulties and division, they can rely on the economic support of the wealthy countries around them. Wars are ultimately won by countries who can survive hardships in an organised way, and whose economies are not brought to breaking point.

The democratic societies of the EU and Nato, for whom freedom is an essential human value that needs to be protected, must stay united and help each other overcome Russian extortion. Luckily, human beings and most nations value freedom highly – even if it comes with a high economic price to pay.The Conversation

Alexander Mihailov, Associate Professor in Economics, University of Reading

This article is republished from The Conversation under a Creative Commons license. Read the original article.

New Englanders support more offshore wind power – just don’t send it to New York

By David Bidwell, University of Rhode Island; Jeremy Firestone, University of Delaware, and Michael Ferguson, University of New Hampshire 

In Rhode Island, home to the first offshore wind farm in the U.S., most people support expanding offshore wind power – with one important caveat.

Our research shows they’re less likely to support a wind power project if its energy flows to another state, and especially if it goes to a rival state. We found the same sentiment holds true on the New Hampshire coast.

Social scientists like us call this “regionalism,” and our research suggests it could have serious repercussions for the renewable energy transition.

Think about the rivalries and sometimes outright animosity among baseball fans. Few regional rivalries are as intense as the one between Boston Red Sox and New York Yankees fans. More than mere bluster, these place-based identities can strongly influence people’s thoughts and attitudes about rival cities in ways that extend far beyond the game. An allegiance to the Yankees can even influence perception of the distance between New York City and Boston.

But do regional identities affect attitudes toward energy development? Our studies of public attitudes toward offshore wind energy development indicate they might.

Which state gets the power matters

We conducted two surveys – one in Rhode Island and the other on the New Hampshire coast – to see how people felt about offshore wind power, including energy exports.

Overall, both groups supported wind power off their shores.

People were happiest if the power was produced for their home states. That wasn’t a surprise. Studies have showed that the public generally objects to energy exports, perhaps fueled by concerns over distributive justice. Distributive justice refers to discrepancies between who bears costs, like having power plants and equipment in sight, and who benefits, such as from revenue and energy produced.

The answers got more interesting when we asked about exporting power to specific states.

For people in New Hampshire, wind power projects that send power to their North Woods brethren in Maine were more palatable than projects that would connect to more urban Massachusetts.

For Rhode Islanders, a wind power project serving Massachusetts was OK, but not one serving New York. That reaction was consistent with the Red Sox-Yankees rivalry, with people in Red Sox-loving Rhode Island preferring the electricity be sent to New England instead.

Our study demonstrates that not only are people less supportive of other states’ claiming electricity produced off their shores, but it also matters which state is involved. It’s important to remember that once electricity goes into the Northeast grid, power from those wind turbines could go anywhere. The power company and state that contract with a wind farm can benefit from the price and credit for contributing that clean energy, but electricity itself isn’t limited to that state, and the climate and clean energy benefits are also more global. However, perceptions of who benefits matter for public acceptance of projects.

What this means for the future

How will this regionalism play out for actual projects? We are not sure, but these are not just hypothetical situations.

A project off the Delaware coast will supply power to Maryland. A project recently approved for development off Rhode Island will provide electricity to Long Island, New York.

The U.S. is poised for a rapid rise in offshore wind power. The Biden administration has committed enthusiastically to offshore wind development, and coastal states have already committed to generating nearly 45 gigawatts of offshore wind power. That’s close to the global total of around 57 gigawatts, and about 1,000 times the current U.S. production from its seven existing offshore wind turbines. The first large-scale project, Vineyard Wind, is under construction south of Martha’s Vineyard to ultimately provide up to 800 megawatts of electricity to its home state of Massachusetts.

Map of coasts showing lease areas offshore
The maps show areas leased for future offshore wind projects.
BOEM

Offshore wind energy has faced some controversy in the U.S. An early proposed project, Cape Wind, was scuttled by two decades of litigation. Public objections often arise over potential impacts to ocean views, the fishing industry and whales and other wildlife. Concerns over distributive justice could also turn public opinion against future projects.

What to do about it

One means of addressing fairness for energy projects is by providing “community benefits” such as sharing revenues with communities affected by offshore energy projects. We believe offshore energy developers and policymakers should broaden engagement to neighboring states and communities and consider how the project might affect nearby communities.

The energy transition may also be expedited by acknowledging place-based identities and planning accordingly, downplaying rivalries. For example, the federal government could move away from naming areas of the ocean designated for offshore wind development after specific states.

About the Author:

David Bidwell, Associate Professor, Department of Marine Affairs, University of Rhode Island; Jeremy Firestone, Professor, School of Marine Science and Policy, University of Delaware, and Michael Ferguson, Assistant Professor in Recreation Management and Policy, University of New Hampshire

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Russia’s weaponization of natural gas could backfire by destroying demand for it

By Michael E. Webber, University of Texas at Austin

In December 2006, The Economist magazine published a cover drawing of Russian president Vladimir Putin, dressed like a 1930s gangster in a dark suit and fedora hat, under the headline “Don’t Mess with Russia.” Putin held a gasoline nozzle, gripping it like a machine gun. The target presumably was Europe, which relied heavily on Russia for oil and natural gas.

The cover story’s subheading asserted, “Russia’s habitual abuse of its energy muscle is bad for its citizens, its neighbourhood and the world.” Today that assertion still rings true with Russia’s cutoff of natural gas deliveries to Poland and Bulgaria.

As an energy scholar who has lived and worked in Europe, I know that gas is a precious commodity that is critical for industries, power generation and heating buildings – especially in northern Europe, where winters can be harsh and long. This explains why European nations import gas from many sources, but have grown to depend on Russian supplies to keep their homes warm and their economies humming.

From oil embargoes to gas cutoffs

The energy weapon can take many forms.

In 1967 and 1973, Arab nations cut off oil exports to the U.S. and other Western nations that supported Israel in conflicts against its Middle East neighbors. Withholding supply was a way to inflict economic pain on opponents and win policy concessions.

Today, an oil embargo might not work as well. Oil is a fungible commodity in a global market: If one source cuts off shipments, importing countries can just buy more oil from other suppliers, although they may pay higher prices on spot markets than they would have under long-term contracts.

That’s possible because more than 60% of the world’s daily oil consumption is delivered by ship. At any given moment, a flotilla of seaborne vessels is carrying crude oil from one point to another around the globe. If there are disruptions, the ships can change direction and get to their destinations within a matter of weeks.

As a result, it’s hard for one oil-producing country to prevent a consuming country from buying oil on the global market.

By contrast, natural gas is moved primarily by pipeline. Only 13% of the world’s gas supply is delivered by tankers carrying liquefied natural gas. This makes gas more of a regional or continental commodity, with sellers and buyers who are physically connected to each other.

It is much harder for buyers to find alternative natural gas supplies than alternative oil sources because laying new pipelines or building new liquefied natural gas import and export terminals can cost billions of dollars and take many years. Consequently, gas disruptions are felt quickly and can last a long time.

French and German experts debate how the European Union will respond to what leaders called energy blackmail.

The real cost of buying Russian gas

European nations’ dependence on Russian energy, particularly natural gas, complicates their foreign policies. As many observers have pointed out since Russia invaded Ukraine in February 2022, European consumers’ heavy reliance on Russian oil and gas over the decades has funded and emboldened Putin’s regime and made European governments hesitant in the face of bad behavior. It was no accident that Russia invaded in February, when it’s coldest and European demand for gas for heating buildings is highest.

Because the European gas grid spans many countries, Russia’s shutoff of gas to Poland and Bulgaria doesn’t just affect those two countries. Prices will rise as gas pressures in the pipelines that run through those countries to other nations drop. The shortage will eventually ripple through to other countries further downstream, such as France and Germany.

If Europeans can reduce their gas consumption quickly as the heating season winds down and gas power plants are replaced with other sources, they can slow the onset of pain. Fuller use of liquefied natural gas imports from coastal terminals could also help.

In the longer run, the European Union is working to increase energy efficiency in existing buildings, which are already efficient compared to U.S. buildings. It also aims to fill gas storage caverns to 90% capacity during the off-peak seasons when gas demand is lower, and ramp up local production of biomethane – which can substitute for fossil gas – derived from agricultural waste or other organic, renewable sources.

Building more import terminals to bring in liquefied natural gas from the U.S., Canada or other friendly nations is also an option. However, creating new fossil fuel infrastructure would conflict with efforts to reduce greenhouse gas emissions to slow climate change.

Ramping up wind, solar, geothermal and nuclear power plants as quickly as possible to displace the continent’s natural gas power plants is a key priority for the EU. So is replacing natural gas heating systems with electric heat pumps, which can also provide air conditioning during the continent’s increasingly frequent and intense summer heat waves. These solutions align with the EU’s climate objectives, which suggests that Russia’s gas cutoffs might ultimately accelerate European nations’ efforts to shift to renewable energy and more efficient use of electricity.

All of these options are effective but take time. Unfortunately, Europe doesn’t have many options before next winter. Prospects are worse for energy customers in poorer regions, such as Bangladesh and sub-Saharan Africa, which will simply go without in the face of higher energy prices.

Will Russia’s cutoff backfire?

While gas supply disruptions will undoubtedly inflict pain on European consumers, they also are hard on Russia, which badly needs the money. Currently, Putin is ordering “unfriendly” countries to pay for Russian energy in rubles to boost Russia’s currency, which has lost value under the weight of economic sanctions. Poland and Bulgaria had refused to pay in rubles.

Cutting off gas supplies in February would have been expensive for Russia and surely would have inspired even more backlash in Europe. By wielding natural gas as a weapon when the weather is mild, Russia can flex its petro-muscles without being too aggressive or losing too much money. The key question now is whether Europe needs Russian gas more than Russia needs revenue from European sales.

About the Author:

Michael E. Webber, Josey Centennial Professor of Energy Resources, University of Texas at Austin

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Meet the power plant of the future: Solar + battery hybrids are poised for explosive growth

By Joachim Seel, Lawrence Berkeley National Laboratory; Bentham Paulos, Lawrence Berkeley National Laboratory, and Will Gorman, Lawrence Berkeley National Laboratory 

America’s electric power system is undergoing radical change as it transitions from fossil fuels to renewable energy. While the first decade of the 2000s saw huge growth in natural gas generation, and the 2010s were the decade of wind and solar, early signs suggest the innovation of the 2020s may be a boom in “hybrid” power plants.

A typical hybrid power plant combines electricity generation with battery storage at the same location. That often means a solar or wind farm paired with large-scale batteries. Working together, solar panels and battery storage can generate renewable power when solar energy is at its peak during the day and then release it as needed after the sun goes down.

A look at the power and storage projects in the development pipeline offers a glimpse of hybrid power’s future.

Our team at Lawrence Berkeley National Laboratory found that a staggering 1,400 gigawatts of proposed generation and storage projects have applied to connect to the grid – more than all existing U.S. power plants combined. A third of these projects involve hybrid solar plus storage plants.

While these power plants of the future offer many benefits, they also raise questions about how the electric grid should best be operated.

Why hybrids are hot

As wind and solar grow, they are starting to have big impacts on the grid.

Solar power already exceeds 25% of annual power generation in California and is spreading rapidly in other states such as Texas, Florida and Georgia. The “wind belt” states, from the Dakotas to Texas, have seen massive deployment of wind turbines, with Iowa now getting a majority of its power from the wind.

This high percentage of renewable power raises a question: How do we integrate renewable sources that produce large but varying amounts of power throughout the day?

Joshua Rhodes/University of Texas at Austin.

That’s where storage comes in. Lithium-ion battery prices have rapidly fallen as production has scaled up for the electric vehicle market in recent years. While there are concerns about future supply chain challenges, battery design is also likely to evolve.

The combination of solar and batteries allows hybrid plant operators to provide power through the most valuable hours when demand is strongest, such as summer afternoons and evenings when air conditioners are running on high. Batteries also help smooth out production from wind and solar power, store excess power that would otherwise be curtailed, and reduce congestion on the grid.

Hybrids dominate the project pipeline

At the end of 2020, there were 73 solar and 16 wind hybrid projects operating in the U.S., amounting to 2.5 gigawatts of generation and 0.45 gigawatts of storage.

Today, solar and hybrids dominate the development pipeline. By the end of 2021, more than 675 gigawatts of proposed solar plants had applied for grid connection approval, with over a third of them paired with storage. Another 247 gigawatts of wind farms were in line, with 19 gigawatts, or about 8% of those, as hybrids.

Bar chart showing overwhelming increase in solar since 2014 compared to other sources and fast rise in batteries in the past two years.
The amount of proposed solar, storage and wind power waiting to hook up to the grid has grown dramatically in recent years, while coal, gas and nuclear have faded.
Lawrence Berkeley National Laboratory

Of course, applying for a connection is only one step in developing a power plant. A developer also needs land and community agreements, a sales contract, financing and permits. Only about one in four new plants proposed between 2010 and 2016 made it to commercial operation. But the depth of interest in hybrid plants portends strong growth.

In markets like California, batteries are essentially obligatory for new solar developers. Since solar often accounts for the majority of power in the daytime market, building more adds little value. Currently 95% of all proposed large-scale solar capacity in the California queue comes with batteries.

5 lessons on hybrids and questions for the future

The opportunity for growth in renewable hybrids is clearly large, but it raises some questions that our group at Berkeley Lab has been investigating.

Here are some of our top findings:

  • The investment pays off in many regions. We found that while adding batteries to a solar power plant increases the price, it also increases the value of the power. Putting generation and storage in the same location can capture benefits from tax credits, construction cost savings and operational flexibility. Looking at the revenue potential over recent years, and with the help of federal tax credits, the added value appears to justify the higher price.
  • Co-location also means tradeoffs. Wind and solar perform best where the wind and solar resources are strongest, but batteries provide the most value where they can deliver the greatest grid benefits, like relieving congestion. That means there are trade-offs when determining the best location with the highest value. Federal tax credits that can be earned only when batteries are co-located with solar may be encouraging suboptimal decisions in some cases.
Rows of solar panels and two batteries the size of small shipping containers sit in a field.
Hybrid power has become standard in Hawaii as solar power saturates the grid.
Dennis Schroeder/NREL
  • There is no one best combination. The value of a hybrid plant is determined in part by the configuration of the equipment. For example, the size of the battery relative to a solar generator can determine how late into the evening the plant can deliver power. But the value of nighttime power depends on local market conditions, which change throughout the year.
  • Power market rules need to evolve. Hybrids can participate in the power market as a single unit or as separate entities, with the solar and storage bidding independently. Hybrids can also be either sellers or buyers of power, or both. That can get complicated. Market participation rules for hybrids are still evolving, leaving plant operators to experiment with how they sell their services.
  • Small hybrids create new opportunities: Hybrid power plants can also be small, such as solar and batteries in a home or business. Such hybrids have become standard in Hawaii as solar power saturates the grid. In California, customers who are subject to power shutoffs to prevent wildfires are increasingly adding storage to their solar systems. These “behind-the-meter” hybrids raise questions about how they should be valued, and how they can contribute to grid operations.

Hybrids are just beginning, but a lot more are on the way. More research is needed on the technologies, market designs and regulations to ensure the grid and grid pricing evolve with them.

While questions remain, it’s clear that hybrids are redefining power plants. And they may remake the U.S. power system in the process.The Conversation

About the Author:

Joachim Seel, Senior Scientific Engineering Associate, Lawrence Berkeley National Laboratory; Bentham Paulos, Affiliate, Electricity Markets & Policy Group, Lawrence Berkeley National Laboratory, and Will Gorman, Graduate Student Researcher in Electricity Markets and Policy, Lawrence Berkeley National Laboratory

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Crude Oil Can’t Resist Pressure

By RoboForex Analytical Department

Early in the final April week, oil prices are declining; Brent has reached $103.40.

The key reason for this is a new coronavirus outbreak in Shanghai, China. Earlier, Shanghai authorities started slowly removing social restrictions – about 70% of the companies got back to their normal working routine. However, the population’s mobility is still very restricted because the rising tendency in the number of new cases returned last weekend. The Chinese lockdown limits the demand for fuel, thus having a serious impact on energy prices.

The influence of the lockdown in China on global oil prices is pretty strong but it’s early to assess how much time it might continue.

Last Friday’s report from Baker Hughes didn’t show anything positive. The Oil Rig Count in the US gained 1 unit, up to 549. At the same time, Canada’s indicator lost 1 unit. Market players can’t find signals that high energy prices boost the US shale industry, that’s why this aspect is moving to the back burner.

In the H4 chart, having completed the ascending impulse at 114.96, Brent is finishing the correction towards 102.40 and may later consolidate there. If the price breaks this range to the upside, the market may form one more ascending structure to break 117.22 and then continue moving within the uptrend with the short-term target at 132.30. From the technical point of view, this scenario is confirmed by MACD Oscillator: after breaking 0 to the downside, its signal line is falling within the histogram area, which means that the correction in the price chart may continue.

BRENT Crude Oil Chart

As we can see in the H1 chart, after reaching the correctional target at 104.30, Brent is expected to consolidate there. Later, the market may resume growing to break 114.80 and then continue trading upwards with the short-term target at 132.20. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: its signal line is moving above 20 and may grow to break 50. After that, the line is expected to continue moving upwards and reach 80.

BRENT Crude 1 Hour Trading Chart

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.