Crude Oil Could Be Peaking!


The chart above looks at what could be the most important commodity on the planet, Crude Oil and its price action over the past 15-years.

We applied Fibonacci retracement levels to the highs in 2008 and the lows in 2016, at each (1). The rally off the 2016 lows hit the 38% retracement level last month at (2) where it might have peaked.

While it is hitting this key retracement level, monthly momentum is very high at (3), near the same level where highs took place in 2011.

Crude oil traders have amassed a very crowded trade, similar to trade they had in play at the 2014 highs. They established the wrong trade at prior highs, will it be different this time?

What Crude Oil does at (2), could have a big impact on the overall commodity market, stocks and interest rates, if it would happen to be peaking. Keep a close eye on Crude over the next couple of months, it could be sending a very important macro message!



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chistletoe Tue, 07/17/2018 - 07:58 Permalink

The small drop is a seasonal thing ... happens every summer ... as the refineries shift from summer driving season to "back to school".  On the other hand, the hysteria and lack of reason is truly epic ....accusations and blind emotionality ... from both the right and the left ...the center of calm, stability and rationality is completely wiped out ....

Erwin643 Tue, 07/17/2018 - 08:48 Permalink

We already know that conventionally produced oil has peaked at the global scale, with oil from fracking soon to follow (and will have an even steeper decline, if charted separately).

A chart showing oil production from about 1900 would have been more convincing.

JIMSJOE2 Erwin643 Tue, 07/17/2018 - 10:08 Permalink

I have been hearing about peak oil ever since the so called Arab oil embargo and this is simply used to justify higher prices. The planet is flooded in crude. Just recently the US passed the Saudis as the second larger exporter of the stuff. But wait I thought since 1973 we were going to run out.

In reply to by Erwin643

geno-econ JIMSJOE2 Tue, 07/17/2018 - 10:41 Permalink

We will run out of oil and gas.  Just a matter of your time horizon.  Industrially based Oil and Gas discovered 200 years ago.  Our Sun/Earth life expectancy is 4 Billion years and we now have about 2 Billion years left.  Most estimates have  known and possibly new more difficult to find and recover oil and gas deposits lasting another 200-400 years. With increased life expectancy, that is only 5- 10 generations. 

  Only hope is Fusion technology  converting Hydrogen to Helium but highly doubtful of breakthroughs due to cost, feasibility, and proclivity of man destroying civilization  and planet environment  via pollution, depletion of Ozone layer, CO2, air quality and WARS all of which gets us back to the Helsinki Meeting of human progress in solving the Worlds problems..   

In reply to by JIMSJOE2

MrNoItAll JIMSJOE2 Tue, 07/17/2018 - 11:29 Permalink

You've been hearing, but you haven't been studying. That is obvious from your comment. Oil production is a very complex subject. I suggest you do some research online and find out exactly WHAT US is exporting -- not a lot of crude oil, that's for sure. Instead, USA imports millions of barrels of crude oil daily, refines or otherwise adds value, then exports THAT product. So your ill informed statement that "US passed the Saudis as the second larger exporter of the stuff" is less true that you might believe. There is some disagreement about when CONVENTIONAL crude oil production peaked, or if it has, but any research will show that without doubt the world's major oil fields -- the ones we've been depending on for economic growth -- have almost all peaked and are now in decline. Go to, read through the articles and comments there, you'll find plenty of fact from experts working in the oil business all their lives. BTW: We will NEVER run out of oil on planet earth. But we will eventually run out of ENOUGH oil to keep this shit show of a global economy rolling forward day by day, despite massive infusions of debt. That day is coming very soon. Oil shortages are ON THE WAY. Says EIA and Saudi Oil Minister, among others.

In reply to by JIMSJOE2