by Alexandra Lienhard
Updated: December 12, 2016
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[Editor's note: The text version of the video is below.]
Alexandra Lienhard: I'm Alexandra Lienhard for ElliottWaveTV, and today I have Steve Craig joining me by phone. Steve is Elliott Wave International's Chief Energy Analyst and the editor of EWI's Energy Pro Service. Now Steve, what is happening in the crude oil markets these days, volatility certainly seems to have picked up?
Steve Craig: Hi, Alex. Yeah the volatility has been incredible in the oil markets lately. Really, it all goes back to the November 30 OPEC meeting where they agreed to cut production by 1.2 million barrels per day in 2017. The market had initially shot up. It pulled back in a corrective manner since then, and with this last meeting of non-OPEC nations joining in, I think it's about 560 million barrels per day that they've pledged in production cuts. The markets again were spurred higher by the news. So, really all eyes are going to be on the beginning of next year when some 1.8 million barrels per day should begin to come off the market in response to these latest OPEC and non-OPEC actions. So, we'll just have to sit back and see whether or not it materializes.
Alexandra: From your perspective, how's crude oil looking on the charts?
Steve: Well, as far as the price goes, this last go round, we shot up to $54 and change in overnight activity, and that was really right in line with expectations. We can now move our key levels up with some comfort; they need to hold on the downside. So, right now it looks like everything is green-lighted for further strength, and certainly that's what we been expecting lately and will expect probably heading into 2017 and a little bit beyond.
Alexandra: What about the rest of the energy complex, is it on the move as well?
Steve: Well, you know Brent has obviously moved along with WTI, they've both reached their 2016 highs, and then Heating Oil's done pretty much the same. -Unleaded gasoline has been the laggard, and I would expect it to play some catch up as the markets move forward in time.
Alexandra: Thanks for talking today Steve, crude's been an exciting market, so I appreciate your insight.
Steve: Sure Alex, anytime.