Related Topics
Energy , Investing , Commodities
     

Crude Oil: 23 Years of Spot-on Forecasts You Can Fact-Check

For commodities like crude oil, supply and demand factors aren't everything

by Bob Stokes
Updated: November 03, 2022

Everyone who drives a car is relieved that gas prices have dropped from what they were a little while back.

However, if one major Wall Street firm is correct, get ready for higher prices at the pump again. This is a Nov. 1 headline from Markets Insider:

Tightening oil supply will drive crude oil prices to $115 a barrel by April, Goldman Sachs strategist says

Of course, higher crude oil prices mean higher gas prices and vice versa.

But does a "tightening oil supply" mean higher crude oil prices? Well, that's certainly conventional wisdom, but as Elliott Wave International has observed over the decades, you cannot count on conventional wisdom.

Indeed, Chapter 22 of Robert Prechter's landmark book, The Socionomic Theory of Finance, asks:

Do Supply and Demand Regulate Oil Prices?

He goes on to answer that question by saying:

The correct answer is... no, they don't. In this chapter, I support my conclusion and demonstrate its value.

In a nutshell, Elliott waves regulate the trend of oil prices and the successful calls Elliott Wave International analysts have made over the years offer strong evidence for this.

Keep in mind that as you look at this chart from the book, it took Robert Prechter 43 pages to go into the details of how Elliott wave analysis called every major price turn in crude from 1993 into 2016:

OilElliottWaves

Indeed, the very title of the chart says it all:

Elliott Wave Analysis Forecasted And / Or Recognized In Real Time All Of These Waves And Their Turning Points

Keep in mind that no method of analysis offers guarantees, yet -- looking at what's going on now -- our October Global Market Perspective noted:

Crude extended its string of lower lows and lower highs in September as anticipated.

The October Global Market Perspective goes on to provide a forecast for crude oil.

Also know that the new November Global Market Perspective, which publishes on Nov. 4, provides a crude oil update.

Looping back to that crude oil price target by the major Wall Street firm, that price may at some point be hit. The point is that it's best to consult the Elliott wave model rather than basing a crude oil prediction on supply and demand.

Follow the link below to get our outlook on oil, natural gas and other major global financial markets.

Crude Oil Is Just a Drop in the Bucket...

Your Investment Bucket, That Is

For the past 30 years, early each month we publish the one investment guide that gives you forecasts for the world's 50+ biggest markets ALL IN ONE PLACE.

Across our Global Market Perspective's 50-plus virtual pages, you'll find in-depth coverage of assets in the U.S., Asian-Pacific, Europe and occasionally other regions like the Middle East or South America.

Global stock markets and economies, currencies, bonds, metals, cryptocurrencies -- and yes, oil and gas... the list is long.

Follow the link below to review this global "roadmap" so you can prepare for market moves that -- as always -- will likely take the majority by surprise.

EXCLUSIVE

"A Classic Bearish Reversal Sequence"

In this clip from our Commodity Pro Service, editor Jim Martens highlights a "classic" Elliott-wave setup that can lead to a high-confidence trend change. In Jim's words, "A classic bearish reversal sequence I always mention. I want to see this before I'm confident that the trend has changed." The good news, you can apply this lesson to any market!

PTPC: In Harmony with Social Mood -- The Genius, King, Godfather and Poet Laureate

Ray Charles. Elvis. James Brown. Chuck Berry. These four pop music icons need no introduction. Music historians have told their individual stories many times. But when we zoom out and look at their careers collectively, we see the indelible influence of social mood on their bouts of triumph and tumult.

Trends, Turns and Dollar Index Opportunities Since 2021

Sentiment indicators can help you anticipate huge turns in financial market trends. See exactly what Short Term Update subscribers saw at the start and the end of a two-year move in the Dollar Index.