{"id":59584,"date":"2012-03-01T10:58:42","date_gmt":"2012-02-29T23:58:42","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2012\/03\/01\/oil-overbought\/"},"modified":"2012-03-01T10:58:42","modified_gmt":"2012-02-29T23:58:42","slug":"oil-overbought","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2012\/03\/01\/oil-overbought\/","title":{"rendered":"Oil Overbought?"},"content":{"rendered":"
\n\tBy Jonathan Barratt<\/span><\/div>\n
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\n\tWe have been long oil for sometime and last week we decided to place a trailing stop in on our position, as such we have been stopped out of the position with good profits. It is interesting to see at the moment that the market has decided that the Middle Eastern premium, as a result of the tensions in Iran, is just too high. We agree and hence the strategy to place a “trailing” stop on the position. <\/div>\n
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\n\tThe situation in Iran remains tense and as we have mentioned before this remains a wildcard. Remember that Iran is the fourth largest producer and forth-largest exporter of the commodity so further escalation of the tensions should impact the price of the commodity. The stalemate we suggest will continue for some time to come with Iran, we feel so far, having the upper hand. As a result this should support prices on any dip until a resolution is found. However, the question that needs to be asked is the effect the high price of oil will have on the global economic recovery and to what extent, barring the Middle Eastern premium, should prices be higher than US110.00 (WTI<\/span>)?<\/div>\n
\n\t
\n\tThis is an interesting question as we feel the recent price rise has only been on the back of the tensions caused by Iran. The world’s number one consumer, the US, has been in recovery mode for sometime as indicated by the positive economic numbers coming from the region. However, the interesting point is that so far this recovery has not yet translated into an actual increase in demand. US inventories continue to increase and demand continues to fall. Keep on eye on Department of Energy Inventory Report Thursday afternoon (GMT). As the price of the commodity goes higher this will further reduce demand and as such prices should retreat. So, if we discount the effects of Iran, and look at current consumption we should not be trading at these levels. US 108 and 110.00 we can suggest is very expensive. <\/div>\n
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\n\tAt the moment the bullish call we have had for sometime is being revised and we can suggest that a good pull back is imminent, whilst we play catch up. We continue to support higher prices later on in the year, as per our annual forecast, but at the moment, these levels for oil we feel they are not justified. We stress Iran is still a wildcard and if tensions escalate into some form of military intervention, prices will rally.<\/div>\n
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\n\tOn the Brent\/WTI<\/span> spread we expect to come in from US20.00. <\/div>\n
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\n\tChart Point<\/u><\/div>\n
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\n\tThe charts are suggesting that US110.00 will be a top for sometime as the rejection was pretty server. Momentum indicators are over-bought and we can suggest that a pullback is on the cards. Expectations are for the market to correct back to US104.00 then US100.00. If you have the courage to go short, stops need to be placed above US110.00. The range for the market is US110.00 on the topside and US100.00 on the downside.<\/div>\n
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\n\tProduced by Jonathan Barratt<\/span> direct from the trading desks of Commodity Broking<\/span> Services, Barratt's<\/span> Bulletin provides expert analysis of commodity markets, global indices and foreign exchange movements. Click here <\/a>to take a no obligation 21-day trial to Barratt's<\/span> or to learn more visit www.barrattsbulletin.com<\/a>. Content included in this article is not by association necessarily the view of FNArena<\/span> (see our disclaimer).<\/em><\/div>\n

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\n\tThis report is not, and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, products, securities or investments. This report does not, and should not be construed as acting to, sponsor, advocate, endorse or promote products or any other products, securities or investments. This report does not purport to make any recommendations or provide any investment or other advice with respect to the purchase, sale or other disposition of products, securities or investments, including, without limitation, any advice to the effect that any related transaction is appropriate for any investment objective or financial situation of a prospective investor. A decision to invest in securities or investments should not be made in reliance on any of the statements in this report. Before making any investment decision, prospective investors should seek advice from their financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.<\/i><\/p>\n

\t <\/p>\n","protected":false},"excerpt":{"rendered":"

Jonathan Barratt of Barratt’s Bulletin feels oil prices hve run too far, too fast on Iranian tensions.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[24],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/59584"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=59584"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/59584\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=59584"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=59584"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=59584"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}