What do you think oil and commodity price these days? Are they going downhill from here?

Question

What do you think oil and commodity price these days? Are they going downhill from here?

Answer 1

they are retracing off of their highs.  Right before elections the pattern has been to slow down political turmoil, use the fed to control intrest rates and take emphasis off liquidity issues.

Price coming back to even as far as $109 will keep us in the bull trend for the market.   Remember you need 2 quarters, 6 months of declining prices for it to be considered a bear market.  

Oil is 688% higher from its low in 2002.

Oil has gone up 152% since the beginning of 2007

This is just a healthy pullback to keep this oil bull running.

No crystal ball available but seeing that:

China's oil demand has incresed 25% this year alone, and their currency is 25% stronger against the dollar.  This offsets any price increase.

India oil consumption grew by 5%, and diesel increased 25%

Canada, Venezuela and Mexico's exports to the US have decreased this past year.  Saudia Arabia oil production is peaked, what they say and what they do is completely different.

$150 oil is not far away, I almost expect to see it head to $190-$200 this year.

Answer 2

My guess is they will both trade sideways for the near term...oil lower... ags higher.... but in the long run they will both be gainers.

Answer 3

Looks to me like the commodity price bubble is bursting for good.  The first signs of this occurring were back in the Spring, when the grains, metals, and market such as Sugar and Cocoa had significant drops.  After a bit of consolidation, some of these markets went on to make new highs...Corn and Soybeans due to Midwest flooding, Cocoa, and of course Crude Oil.  Over the last few weeks, these markets have broken sharply, and their current trends have turned down.  

As I still see bullish sentiment out there, I believe we have seen major highs put in place in most of these markets, and the easy money will be made on the short side.  In Crude Oil, a rally up to $135-$140 will present a good shorting opportunity.

Good Trading!

Scott Cole

www.kungfutrader.com