Bullish Crude 3rd April 2011
By Kanti Mohan Pandit, CEO
Center Business Intelligence & Forecasting
The first phase of falling crude price appear to be over with price rising from the month of April. The market is bullish now and investors are happy finding more money to put in the channel. Will this euphoria continue for longer or investors and traders will have to face another setback soon? This is the burning question at present and need to be answered. As we have witnessed the market with falling Brent price since 8th March 2011 and touching the bottom of $107 per barrel in March itself. But the fast changing geopolitical scenario in the oil producing states pulled up the price again to restore it from where it moved down.
The international oil scenario is still on turmoil. I had thought the price of oil would fall on the news of Libya accepting the Truce offered by UN but that was a mirage. The Libyan dictator is not in the mood to relent so easily. He is still prolonging the turmoil with a view to break the country. In this situation there is bound to be pressure on global oil supply of the sweet variety Libya produces. There are other Arab countries also which are burning at present. Yemen is a hotspot. The fire here may burn even South Arabia. Nigeria may erupt on the occasion of their presidential election to be held this month. These burning issues are likely to put the oil issue warmer or on fire to lift prices of crude oil on higher side.
On demand side Japan may be getting ready to rebuild and restart the defunct refineries and the damaged roads to make then transportable. This will demand more oil very soon. America’s gradual economic recovery also may add to the demand for more oil in near future. India is on the new budget period with higher growth target requiring more oils.
These factors of mismatched supply and demand are putting oil investors and traders on tenterhooks. They expect prices to go up amidst the uncertainty and ready to buy at higher prices. The result is the current crude price at $118 (Brent) and 106 (WTI) per barrel.
The ‘Energy Pro Analytics’ designed by me based on space energy also indicates towards higher prices in the future. There is likelihood of an intermittent correction in the rising price of oil by 6th or 7th of April. From 14th April the resistance forces are likely to thrive on the productive energy module present today. This may create hurdles for smooth flow of oil supply in the market resulting in higher oil prices further up. Brent oil may touch more than $125 per barrel by 21st April 2011.
This analysis is educational and investors require their own study to apply this for investment purpose. Best of luck!
Bullish Crude in April 2011
Advertisement
