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:
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.
When you combine Elliott waves with other technical analysis indicators, often it helps you clarify your forecast. Watch our Currency Pro Service editor, Michael Madden, combine the waves with classic technical tools like Head & Shoulders and RSI to forecast the next move in USD/CAD.
Is the stock market's main trend up or down? It's a basic question that Elliott wave analysis helps you answer -- and thus anticipate countertrend moves that fool others -- even those who are accomplished. For example, here's the brief story of a physician's portfolio.
In early 2020, the Covid-19 pandemic delivered a "shock like no other" to the global commodities sector. The bearish "fundamental" shoe seemed to fit like a glove. But instead, a 2-year long bull market occurred. Maybe it's time to slip into a new pair of market analysis.