|
Special Series
Why Oil Prices Change
For more reading on why oil prices change -- and why they don't, please read all parts of the series.
Part I, Part II, Part III
|
|
These days, there’s more round-the-clock press coverage of soaring oil prices than of the Democratic party's primary elections. And, much like those political contests, each day the mainstream “experts” offer a new twist on the outcome (Monday: Obama delivers the “knock out blow.” Tuesday: Clinton “secures the lead.”)
The fundamental frontrunner for why oil prices change is a moving target. Case in point: the two leading contenders for the great energy race have each gone from surefire shoe-in to unlikely underdog:
Why Oil Prices Change: Supply Shortages?
An April Energy Information Agency report reveals that U.S. demand for petroleum has fallen steadily since June 2007, alongside a decade high in gas reserves and historically adequate oil reserves.
Why Oil Prices Change: Weak Dollar?
The greenback has depreciated 30% against the world’s currencies since 2002 -- where the price of oil has exploded 500%. Not exactly an even fight.
The truth of the matter is simple: Oil prices are not being driven by ever-fluctuating external news events. The “winning” factor behind the market’s trend is mass social mood, as reflected in clear and consistent Elliott Wave patterns unfolding on oil’s price chart.
This objective measurement has guided EWI’s Global Market Perspective’s energy commentary from the start -- and has enabled our subscribers to stay ahead of many of oil’s most memorable moves.
How High Will Oil Fly?
The May 2008 Global Market Perspective’s chapter on“Energy” presents original price charts and objective analysis that reveal where crude oil may be in the months ahead. Learn More.
In this case, seeing is better believing: The following chart tracks the last DECADE of oil prices, darted by bold arrows where Global Market Perspective analysis foresaw major turning points BEFORE they occurred.
The numbers on the chart correspond with these specific GMP insights:
#1: December 2000: “We are soon likely to see a wave (c) decline… to the 19.13 level. Once the correction [ends], I expect crude to explode upward. One relatively conservative projection would take crude oil up to $61 per barrel in the coming years.”
Please Note: Global Market Perspective’s bullish long-term forecast for crude oil came long before the dotcom boom went bust, the stock market bubble burst, the terrorist attacks of September 11, 2001, the U.S. invasion of Iraq, the turnaround in the U.S. housing market, the credit crisis, and recent calls for a recession.
#2: November 2001: “[This] is the final leg down of the larger correction.”
#3: December 2001: “Crude is destined for record highs in the years immediately ahead.”
#4: September 2005: “The coming oil ‘shock’ is not that oil is booming, but that it will fall.” -- From its August 31 peak, oil plunged 20% in three months.
#5: July 2006: “A top is occurring now. A setback of at least Primary degree is due.” -- From its July 14 peak, oil endured a 36%, six-month sell-off to its lowest level in 19 months.
#6: March 2007: “Given the depth of the decline from last summer’s record high, an impulse wave into record territory would fit the… advance.”
While the fundamental race rages on, the next major opportunity is underway. Get instant access to the May 2008 Global Market Perspective via a risk-free subscription today.