Energy & Commodities

Crude Oil’s Bearish Reversal: Will It Last?

How EWI’s Energy Specialty Service used objective analysis to anticipate the May turnaround in crude oil

One of the biggest flaws of mainstream financial analysis is that it baits traders with a specific fundamental “hook.” And once snared, they are forced to go wherever the reel draws them in, powerless to resist.

If prices should go the other way (as they often do) the trader is caught while the experts get off scot-free with choice phrasing like “prices fall DESPITE bullish supply data,” OR “prices BRUSH OFF bearish jobs report.”
The Wave Principle, on the other hand, is founded on a number of key rules and guidelines that enable you to adjust your Elliott wave counts as price action sees fit. With this solid framework in place, Elliott wave analysts approach a market able to determine these (and more) criteria:


  • Fibonacci-calculated price support and resistance levels on a chart
  • The likely length of developing waves in relation to other waves
  • And, whether the trend at hand is impulsive or corrective– as in, here to stay or not.

Below here is the top of the Completed Elliottwave Move in the Oil Bull Move at the top in 2008

Here is how it has unfolded since the top as seen on this Monthly Oil Chart which is fairly clear to see that it is in a corrective mode since the top in 2008

Picture 1

Let’s turn to a real-world example with the recent price action in crude oil. See, on May 2, both the mainstream experts AND EWI’s Energy Specialty Service were near-term bullish on crude oil. Herein, however, lies the difference:

eliottWaves oil_body_crude-1


  • The fundamental camp presents its case with this May 2 news story: “Crude oil futures start May by bouncing to a five-week high as US manufacturing growth in April hit the highest in 10 months, boosting the demand outlook for oil.”


In this case, there is no wiggle room to prepare for an alternate (i.e. bearish) outcome. This would be fine IF market analysis was about 100% certainties. But, as Elliott analysts know, it’s aboutprobabilities.


  • That same day, May 2, EWI’s Energy Specialty Service revealed how its “preferred” bullish Elliott wave count for crude oil hinged on this crucial action: “Crude needs to continue higher to support the idea that the next leg of the advance is underway. At this point, trade below 101.82 won’t bode well for the idea that the decline from the early March peak is done… and an even longer decline would seem likely.”


On May 3, crude oil prices broke the 101.82 price level. The May 3 Energy Specialty Service1:56 pm intraday update confirmed the bearish event and wrote:
“The market’s failure to extend the advance argues for the alternate count… A much deeper decline should lie ahead.”
And again, the May 15 Energy Specialty Service “DAILY” update suggested the bearish trend would not be a temporary and wrote:
“Regardless of the short-term iterations, the key point is that sharply lower lows should be the central theme for some time to come.”
It has been “some time” indeed since then. Don’t get caught in a fundamental corner. Stay ahead of the near-term changes in crude oil via EWI’s trader-focused Energy Specialty Service.

Electric Companies Are Shutting Down

Over the next few months, you’ll have a front row seat to the turning point in America’s energy independence as nearly 85 million businesses and homes have the chance to stop paying their electric bills. – NICK HODGE OF ENERGY & CAPITAL

Ed Note: Its no secret that Solar Energy is spectacularly unprofitable without massive government subsidies. Just take one look at Obama’s scandalous taxpayer investment in Solyndra that has now brought the FBI into investigate what happened with Solyndra’s,  $535 million government-backed loan with the help of the Obama White House over the agressivee objections of federal budget analysts. In short, without a technological breakthrough, solar just isn’t economical withough digging into taxpayers pockets very very deeply.

 Energy & Capital describes a huge technological breakthrough that is right upon us and for those in early the profits with be enormous. Though I remain cautiously sceptical with all of the boondoggles in Green Energy to date, I do think this one is worth a look – Rob Zurrer for Money Talks.

Electric Companies Are Shutting Down

Over the next few months, you’ll have a front row seat to the turning point in America’s energy independence as nearly 85 million businesses and homes have the chance to stop paying their electric bills.

This is not a revolt, organized political stand, or protest against “the corporations” — far from it, actually…

In the next few months, one of the greatest breakthroughs of the last century will hit the open market.

It will allow virtually every building in America to affordably start generating its own electricity without unsightly turbines or generators. And most importantly, without any government subsidies.

It’s all thanks to one publicly-traded tech firm that’s rapidly garnering worldwide attention.

Over the past two months alone, this company’s share price is up 44% — with near-infinite growth potential.

You don’t want to miss another point from this gem, which is why I’m giving you free access to this short presentation.

I want you to be fully informed on the situation and how to take advantage of it, come the next opening bell…

Call it like you see it,

Nick Hodge
Senior Editor, Energy and Capital

Watch the short video HERE or read Transcript HERE

This ‘Absolute Black’ Solar Panels Absorb Almost All Sunlight

ht Natcore technician nt 120323 wblog

Oil Has Even More Downside Ahead

In the last two months, the benchmark U.S. crude oil price has dropped more than 20%.  

And it’s not done falling.

As regular Growth Stock Wire readers may remember, I began writing about a collapse of the price of crude oil back on April 4. At the time, oil prices were still up around $105 per barrel.  

Back then, I noted how the huge and growing U.S. oil inventories, coupled with growing U.S. production, would cause prices to drop. Since then, the price of crude oil has fallen below $80. Last week alone, we saw prices decline 6%.

Today, I’ll show you why I think oil prices are going even lower…

The fundamentals of supply and demand remain out of balance in the oil market. Two months ago, I showed you how much more oil we had in storage than the 10-year average. Here’s an updated chart… 

You can see things have gotten even more extreme.


One important point to note is that usually, the oil in storage is declining by June as the summer driving season kicks in.  

This year, according to the Energy Information Administration’s data, the volume of oil in storage is still rising into the summer. It hit 387.3 million barrels at the end of last week. That’s 11% more than it was when we checked in April. And it’s 12% above the average for this time of year.  

In other words, the world’s largest oil consumer has a lot more oil around than it usually does. So supply is up, what about demand? 

Turns out demand is way, way down. Gasoline constitutes 42% of oil demand here in the U.S. So we can use the volume of gasoline supplied by refiners as a rough gauge. In April, which is the latest data available, we see the gasoline consumption was about 344.6 million gallons per day. That’s the lowest consumption for the month of April since 1997.  

Demand is not only failing to keep pace with the huge new supplies coming online… it’s actually falling.

It was a recipe for lower oil prices two months ago. The same is true today. I don’t know exactly how far it could fall, but $70 or $60 is easily possible in the next six months.

Good investing, 

Matt Badiali

P.S. Yesterday, my colleague Jeff Clark showed you how oversold oil stocks are right now. He’s expecting a short-term bounce soon. He might be right. But I believe the long-term trend is still down. Unless you’re a trader, you should probably be out of oil stocks here.

Further Reading:

Oil isn’t the only commodity sector that’s suffering…. Matt says small resource companies are going to fall further before resuming their uptrend. They’re toxic for 99% of investors right now. But in the long-run, this market is doing us a favor…  

“When it’s over, we’re going to be able to buy the highest-quality stocks in the sector for 2009 prices,” Matt says. “That’s when we’ll make big, triple-digit gains.”Get the full story here.

3 Ways To Invest in the Oil Sands

Energy stocks across the board have been hit hard in the last quarter—both producers and service companies.  Stock charts have been laid to waste. Neither sexy resource plays nor respected leadership were enough to stem the bleeding.

But shareholders of three energy services companies—Gibsons Energy (GEI-TSX), Black Diamond Group (BDI-TSX) and Horizon North Logisitics (HNL-TSX)—are laughing all the way to the bank, as their stock charts are at or near all-time highs. (See OGIB story on Black Diamondhere.)

And strangely enough, they are all oilsands related.  I say strangely because analysts have not been kind to the producers, warning investors that lower Canadian heavy oil prices could stay for a couple years, impacting profitability.  And there is no close resolution on increased pipeline capacity to handle any increased oilsands production.

On the services side, Canadian securities firms like National Bank and Raymond James have been telling their clients to sell oilfield services stocks for weeks.

The first 2 oilfield services companies are Black Diamond Group (TSX-BDI) and Horizon North Logistics (TSX-HNL), which derive a substantial percentage of their revenue from business related to Alberta’s oilsands.

They provide a turnkey-style Camps and Catering service offering, including manufacturing, transportation and installation, servicing, as well as catering. These companies basically make money from renting beds to oilsands workers, including charging them for management and catering. The work camps are equivalent to small villages with a population exceeding 3,000 souls in some instances.

black-diamond-group 2

….read more and view two more charts HERE

Ed Note: Michael Campbell thinks Canada’s Oil Reserves are the Key to Federal Pension / Economic Solvency. 

The Benefits of a Bountiful Oil Supply by Joel Bowman 

6/20/12 Stavanger, Norway – Mercedes…Mercedes…Volvo…Mercedes…BMW…Mercedes…Volvo…

We were waiting for a taxi outside Oslo’s central train station on the weekend. Not since our dusty stint in Dubai had we seen so many luxury vehicles in a row, all with a meter and a foreign driver, waiting to shuttle the locals around town.

Norway is an expensive place to be. Unless you have the good fortune (literally) of being Norwegian. Tiny, one-bedroom houses on the outskirts of town start at roughly half a million dollars. A round of drinks for four at a pub will eat up most of a $100 note. And oysters down by Oslo’s main pier (admittedly some of the best “Rolls Roysters” we’ve ever tasted) sell for $7 per…um…slurp.

Sitting in the back of the taxi, looking out the window at all the sleek stores and grand old hotels along the famous Karl Johans Gate, we began wondering how a cab driver could afford to live in such a place. Then we arrived at our hotel…barely a five minute drive from the station.

“That’ll be 150 kroner,” said the driver, in perfect English. Our European readers will recognize that amount as about €20. Americans may call it $25. Ah…so that’s how. When it came time to depart the capital, we paid ourself $25 to walk back to the station. Easy money.

Of course, it wasn’t always this way. A little more than half a century has passed since Phillips Petroleum Company (since merged with ConocoPhillips) discovered the Ekofisk oil field in the North Sea. Production began in 1971 and was followed by a slew of other fruitful discoveries, both of oil and natural gas. Since that first well was sunk, Norway’s GDP, adjusted for inflation, has more than quadrupled. Happily for this northern nation, Norway also derives 99% of its domestic energy consumption from hydropower. Nice source…if, again, your geography allows for it.

As of March this year, the total value of Norway’s Sovereign Wealth Fund (SWF) was NOK 3,496 billion ($613 bn) — the world’s largest. Officially The Government Pension Fund of Norway, the fund derives its wealth not from pension contributions, but primarily from oil revenues, including taxes, dividends, sales revenues and licensing fees. Norwegians refer to it simply as Oljefondet, or “The Oil Fund.”

This vast wealth has allowed the Norwegians to indulge in that most costly of economic experiments: Socialism. Proponents of this sadly persistent model of welfare statism like to point to the “Nordic Model” as proof that their tax-and-spend philosophies work. As usual, they confuse cause and effect. Norway’s riches are the result of oil, not socialism. Wealth comes from revenue, savings and capital formation, in other words…not from spending, public works and redistribution. Norway’s oil riches make the case for socialism as well as Abu Dhabi’s riches make the case for oppressive medieval sheikdoms — i.e., poorly to not at all.

Fortunately for Norway — and conveniently for reality-averse advocates of the welfare state — the North Sea’s hydrocarbon bounty is not about to run out overnight. Although production from the North Sea’s largest field, Statfjord, has been in steep decline since the mid ’90s, revenue continues to pour in from smaller, surrounding deposits. Conservative estimates predict the fund may reach $800-900 billion by 2017 — roughly $200,000 for every ridiculously attractive member of the population.

As regular reckoners know, however, the state is always and everywhere working to misdirect capital, to distort markets and to indulge folly. This is true no matter how joyous its people, how scrumptious its seafood, how picturesque its fjords.

Joel Bowman
for The Daily Reckoning

Joel Bowman

Joel Bowman is managing editor of The Daily Reckoning. After completing his degree in media communications and journalism in his home country of Australia, Joel moved to Baltimore to join the Agora Financial team. His keen interest in travel and macroeconomics first took him to New York where he regularly reported from Wall Street, and he now writes from and lives all over the world.

Special Report: Wait until you see what could happen in America next… An unbelievable phenomenon is set to sweep the nation… The railroad, steel, and technology age – this phenomenon triggered them all. And now it’s taking shape again! Watch this special, time-sensitive presentation now for full details on how it could affect your job… your lifestyle… and your wallet. Here’s How…

Read more: The Benefits of a Bountiful Oil Supply